While the Myanmar government is doing all it can to court investment from China to prop up the country’s sluggish economy, the military is shutting down selected projects involving Chinese investors.

The Irrawaddy reported on October 4 that the Ministry of Commerce wants to create a string of “economic cooperation zones” along the border with China as part of Beijing’s Belt and Road Initiative (BRI) to develop the infrastructure across the region.

Cooperation zones will be established in Kanpiketi (Kampaiti) in Kachin State and in Shan State, near the border town of Muse, as well as Chinshwehaw in Kokang, an area dominated by ethnic Chinese.

These zones will house trade and processing areas, small and medium-sized industrial facilities, trade logistics centers and repackaging factories for agricultural products bound for export to China.

Myanmar and China have signed five memorandums of understanding (MoUs) since 2017, agreeing among other things to build such zones on the border.

Last month, Beijing and Naypyitaw signed an MoU on the China-Myanmar Economic Corridor, a vital part of the Belt and Road scheme. The corridor will connect China’s Yunnan province with the old capital Yangon and the Kyaukphyu Special Economic Zone on the Bay of Bengal in Rakhine State.

But yesterday news emerged that the Myanmar military has shut down a Chinese-contracted US$500-million high-rise project in Yangon after the developer was found to be in breach of a MoU signed between Myanmar and a Chinese developer.

The landmark Myayeik Nyo project on more than 13 acres of land owned by the military was slated to have 12 high-rise buildings and would feature hotels as well as serviced apartments. The China State Construction Engineering Corporation had a 60% stake in the project while Myanmar’s Zaykabar company 40%.

The developer allegedly demolished heritage-listed buildings on the site and allegedly missed payments to the Yangon Cantonment Board despite repeated warnings. The Cantonment Board oversees military-owned land in the city. These issues were said to be breaches of a contract Zaykabar signed in January 2014.

Irrawaddy said there was considerable public concern about the high-rise project, as there were fears that it could cause a nearby reservoir holding 20 million gallons of water to collapse.

Myanmar’s nationalistic military, suspicious of China’s long-term intentions, is known to be more wary than the government of large-scale projects involving Chinese investors.

Zaykabar is also owned by Khin Shwe, a local businessman whose daughter is married to one of the sons of Shwe Mann, a former military officer who broke ranks and allied himself with state counselor Aung San Suu Kyi.