The Strategic and Economic Implications of Myanmar's Potential SCO Membership for China and Regional Investors

Myanmar’s participation in the 2025 Shanghai Cooperation Organization (SCO) Summit marked a pivotal moment in its geopolitical realignment. As a dialogue partner, Myanmar’s engagement with the SCO—facilitated by China’s diplomatic support—has elevated its strategic profile, offering access to multilateral networks and reinforcing bilateral ties with Beijing. This alignment, coupled with the Belt and Road Initiative (BRI), positions Myanmar as a critical node in China’s broader Eurasian infrastructure ambitions. For regional investors, the interplay of geopolitical dynamics and infrastructure development presents both opportunities and risks.

China’s recent diplomatic outreach to Myanmar’s junta, including President Xi Jinping’s meeting with Senior General Min Aung Hlaing at the 2025 SCO Summit, underscores a calculated effort to stabilize bilateral relations. Xi emphasized “strategic cooperation” and urged Myanmar to prioritize “domestic stability and development,” while Min Aung Hlaing reiterated adherence to the one-China principle [1]. This engagement not only legitimizes the junta within the SCO framework but also signals China’s commitment to advancing the China-Myanmar Economic Corridor (CMEC), a $15+ billion BRI project linking Yunnan Province to Kyaukphyu Port [2]. The CMEC, which includes a 431-kilometer railway and energy pipelines, is central to China’s goal of bypassing the Strait of Malacca and securing direct access to the Indian Ocean [3].

Post-2025, investment flows in Myanmar’s infrastructure and BRI-linked sectors have shown resilience despite ongoing civil conflict. As of July 2024, China’s total approved investments in Myanmar exceeded $21 billion, with energy and mining projects accounting for a significant share [4]. For instance, PowerChina Resources Ltd secured three power projects in Magway and Mandalay regions, adding 90 megawatts of capacity [4]. Additionally, Chinese private enterprises like Xinfa Group and Longi Green Energy have driven investments in lithium and renewable energy, reflecting a shift toward resource-backed projects aligned with global green energy trends [5].

The 2025 SCO Summit further accelerated CMEC-related initiatives, with Xi and Min Aung Hlaing agreeing to expedite cross-border trade and infrastructure projects [6]. This includes the Kyaukphyu Deep Sea Port, which remains a focal point for China’s energy security and regional connectivity. While conflict in northern Myanmar has delayed the Muse-Mandalay railway, China has leveraged diplomatic and military pressure to secure short-term ceasefires, ensuring project continuity [7]. Such actions highlight China’s dual strategy of economic integration and geopolitical stabilization, which could mitigate risks for investors in the long term.

However, challenges persist. The CMEC’s implementation is entangled with local conflict dynamics, with border roads and railways becoming strategic targets in warfare [8]. Moreover, perceptions of BRI projects as extractive rather than developmental have fueled anti-Chinese sentiment in some regions [9]. For investors, these complexities necessitate a nuanced approach, balancing China’s strategic guarantees with localized risks.

In conclusion, Myanmar’s SCO membership and BRI alignment offer a unique convergence of geopolitical and economic incentives. China’s sustained investments, despite regional instability, signal a long-term commitment to transforming Myanmar into a strategic hub. For regional investors, the CMEC and associated projects represent high-reward opportunities, provided they navigate the interplay of political, security, and economic variables with careful due diligence.

Source:
[1] Myanmar and the Shanghai Cooperation Organisation [https://english.dvb.no/myanmar-and-the-shanghai-cooperation-organisation/]
[2] The Belt and Road Initiative 2025 | Myanmar [https://www.cdr-news.com/cdr-essential-intelligence/belt-and-road-initiative/myanmar/]
[3] The China-Myanmar Economic Corridor and the Limits of China's BRI Agency [https://thediplomat.com/2025/02/the-china-myanmar-economic-corridor-and-the-limits-of-chinas-bri-agency/]
[4] China Belt and Road Initiative (BRI) investment report 2025 H1 [https://greenfdc.org/china-belt-and-road-initiative-bri-investment-report-2025-h1/]
[5] China's Playbook: Beijing's Three-Goal Election Blueprint for Myanmar [https://www.irrawaddy.com/opinion/analysis/chinas-playbook-beijings-three-goal-election-blueprint-for-myanmar.html]
[6] Xi meets Myanmar's acting president in Tianjin [https://www.bastillepost.com/global/article/5151971-xi-meets-myanmars-acting-president-in-tianjin]
[7] China Pushes for Belt and Road Progress in War-Torn Myanmar [https://www.irrawaddy.com/news/myanmar-china-watch/china-pushes-for-belt-and-road-progress-in-war-torn-myanmar.html]
[8] The China-Myanmar Economic Corridor and the Limits of China's BRI Agency [https://thediplomat.com/2025/02/the-china-myanmar-economic-corridor-and-the-limits-of-chinas-bri-agency/]
[9] China's Geopolitical Balancing Act in Post-coup Myanmar [https://www.geopoliticalmonitor.com/chinas-geopolitical-balancing-act-in-post-coup-myanmar/]