A mere week after Myanmar celebrated 70 years of diplomatic relations with China, Auditor General U Maw Than has urged parliament to be wary of Myanmar’s growing Chinese debt. In a June 15 speech, Maw Than pointed out that China holds USD 4 billion of the roughly USD 10 billion Myanmar currently owes. Although Myanmar has borrowed heavily from the IMF, ADB and other institutions during the pandemic, he argued that Chinese loans have higher stakes. “The truth is the loans from China come at higher interest rates compared to loans from financial institutions like the World Bank or the IMF [International Monetary Fund],” The Economic Times quoted Maw Than as saying. “So, I would like to remind the government ministries to be more restrained in using Chinese loans.” Currently, Myanmar must pay a total of USD 500 million in interest on Chinese-held debt.

The boom in Chinese debt is tied to the China-Myanmar Economic Corridor, part of China’s far-reaching Belt and Road Initiative. Myanmar has borrowed billions of dollars for infrastructure projects designed to facilitate trade between the two countries. These include new roads, power plants, special industrial zones, and—perhaps most famously—a high-speed railway line linking Mandalay with Muse. The railway, approved in 2018, will be over 400 kilometers long, include 36 stations, and cost roughly USD 7 billion, according to a Myanmar Times report. The railway, and other ambitious projects, could be years from completion. As Chinese-backed projects (such as the notorious Myitsone Dam) tend to draw suspicion among local communities, thorough (and expensive) social and environmental impact surveys will be required for each project. Meanwhile, the amount Myanmar owes China continues to rise.