China is both Myanmar's most influential foreign neighbour and its most nervous. No country is as deeply entrenched in the economy of Myanmar while being so wary of the political reforms that began there last year. This poses a challenge to India on several levels.
Senior Myanmar officials, say diplomatic sources, told their Indian counterparts last year that China was the only external player that could destroy the reform process in one fell swoop. Beijing's concerns were geopolitical. The fear is that a democratic Myanmar will gravitate towards the United States and become a democratic thorn in China's southern flank.
India has already warned Washington that the US should consider a lower profile in Myanmar. However, say US officials, China seems suspicious whether the West is loud or silent. "Every where we go, all the Burmese want greater engagement."
China's economic hold on Myanmar goes back to Deng Xiaoping's determination to fill the void in Myanmar's economy left by Western sanctions. Factories came up all across Myanmar's eastern border, especially near the Shan state areas. Today, in cities like Mandalay and across Upper Burma, China's economic presence is overwhelming.
Democracies like India, Japan and the US already informally discuss how they can work together economically in Myanmar.
Infrastructure proposals like the Trilateral Highway running from India to Vietnam top the list of ideas.
The Chinese have not helped their cause by working so closely with the military all these years. Says David Methieson of Human Rights Watch, "Burmese felt a sense of victory when their government cancelled a $3.6 billion dam last year." While described as a concession to minori demands, there were reports that it reflected growing anti-Chinese sentiment in the Myanmar army as well.
Chinese practices like importing their own labour have also made Burmese unhappy, says Thin Thin Aung of the newspaper Mizzima. "Their projects give us no jobs."
Knowing they have little standing with the pro-democracy leaders like Aung San Suu Kyi, the Chinese have sought to cultivate other sources of influence. Former Indian Ambassador to Myanmar, Rajiv Bhatia, says Beijing has three targets in mind. One is the top Myanmar military leadership, the other is the military's political wing the ruling Union Solidarity and Development Party, and the two speakers of the Myanmar Parliament -- Khin Aung Myint and Thurs Shwe Mann.
SuuKyi has been careful to send the right signals to China. Asked about the scrapping of the dam, she merely said that the Chinese should not be blamed but rather the Myanmar officials who agreed to such an unfair deal in the first place. Says Mathieson, "She sent the signal that we won't hurt you. You can deal with us."
This is practical. China's accomplishments in Myanmar dwarf anything India has done, even though India is in a perfect position to serve as an alternative for Myanmar without causing Beijing alarm. The Myanmarese know they cannot live without their northern neighbour. They have a saying, "When China spits, Burma swims."