Myanmar's investment authorities may fear now that China's traditional industries would mold their country into something it doesn't want to be -- a scrappily overbuilt and polluted land ignominiously dependent on economic relations with the country that sculpted it that way.
"As Myanmar proceeds through the industrialization process, the country is starting to worry that massive imports of manufactured goods from China will jeopardize its weak national industry," Caijing adds. "Moreover, it has also become discontent with simply exporting its resources."
At a deeper and more vexing level, Myanmar "seeks to adjust its relations with China," according to an October 2012 report by the Institute of Developing Economies under the Japan External Trade Organization (Jetro), a government-linked body that promotes Japanese trade and investment in other parts of the world. The Southeast Asian nation formerly known as Burma hatched a foreign investment gold rush after its first transition from military rule to civilian government in 23 years in March 2011. Before then Myanmar stuck by China as Western nations imposed sanctions on the strict authoritarian government. The new government wanted out of China's shadow.
"In order to eventually detach itself from its excessive dependence on China, Myanmar's government began to seek out ways to improve its relations with Western countries," the Jetro report says. "Under these circumstances, Japan reinitiated its full-fledged assistance to Myanmar, and a large number of Japanese private companies began to visit the country."The United States also began to develop its business relationship with Myanmar, for example, by easing restrictions on American companies investing in Myanmar," the (obviously pro-Tokyo) report adds. "Thus, entering the age of democratization, the presence of China in Myanmar is becoming relatively weaker." As of last year, Myanmar's Directorate of Investment & Company Registration said 88% of overseas projects went to power, mining and oil and gas. About 34% of the $40.4 billion in foreign investment then came from China -- too much, apparently. China's lost traction would help American companies that are contributing to services and tourism. For example, KFC, a unit of YUM! Brands (YUM), serves fried chicken served in the capital Yangon. In June, Coca-Cola (KO) announced the opening of its first Myanmar bottling plant, part of the drink giant's five-year investment plans worth $200 million and 22,000 local jobs.
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