caused considerable loss of life; and both were strongly condemned by
the international community. Neither joined the chorus of condem-
nation of the other, however. On the contrary, each lent the other
support in its hour of ostracism. In the early 1990s, Beijing began sup-
plying large quantities of heavy weapons and other military equipment
to the Burmese regime. In the wake of the collapse of the BCP insur-
gency a border trade agreement was signed that led within five years to
annual two-way trade estimated at as much as $1.0 billion.^13 Chinese-
manufactured goods flooded the Burmese market in exchange for illicit
drugs, timber, pearls, and precious stones. Chinese engineers built new
roads and bridges to facilitate this trade, while thousands of Chinese
entrepreneurs, small traders and labourers migrated into northern
Burma in search of economic opportunities.
As in the earlier relationship developed by Ne Win and Zhou
Enlai, interstate relations were reinforced through the frequent
exchange of high-level delegations. It was the developing military and
strategic dimension of the relationship, however, that most worried
Burma’s neighbours. Not only did the Western arms embargo make
Burma entirely dependent on China for its weapons purchases, but
China also provided assistance in the construction of sensitive military
and naval bases on the Bay of Bengal. At the same time, China con-
structed a transportation network linking the Chinese province of
Yunnan with the Burmese river port of Bhamo, from where Chinese
goods passed down the Irrawaddy River to Rangoon. This ‘Irrawaddy
corridor’ gave China not just trade access to the Indian Ocean, but the
means to support a naval presence as well. China’s de facto alliance
with Burma thus threatened greatly to extend Beijing’s strategic reach.
India, in particular, worried over a potential Chinese naval pres-
ence in the Bay of Bengal, and became much more amenable towards
Rangoon. ASEAN, too, was concerned. While Singaporean, Thai and
Malaysian businessmen took advantage of new opportunities for invest-
ment in Burma, political leaders took note of the growing Chinese
presence and influence. This was a principal reason for sounding out
Fresh beginnings