Chinese manufacturers eye Myanmar base as trade war escalates
Myanmar stands to gain from the ongoing trade spat between China and the US, U Than Aung Kyaw, deputy director general of the Directorate of Investment and Company Administration (DICA), said yesterday.
Interest to set up manufacturing and production facilities in Myanmar among the Chinese has risen ever since the US this month imposed a 25 percent tariff on up to $50 billion of Chinese products, he told The Myanmar Times during the sidelines of Myanmar-Korea Investment Promotion Seminar in Yangon.
“Chinese businesses have been making enquiries at DICA about investing and setting up base in Myanmar,” he said.
Myanmar may well see a spike in manufacturing companies from China setting up operations as the latter’s trade war with the US escalates.
After the first round of tariffs was imposed by the US, a retaliatory move by Beijing saw some $34 billion of US goods to China placed under a 25pc tariff.
On Monday, the US then threatened to levy an additional 10pc tariff on $200 billion worth of Chinese products. If imposed, the move would place around half of China’s $505 billion worth of exports to the US under tariffs.
Now, it appears that a rising number of Chinese manufacturers want to produce out of Myanmar, enabling them to bypass US tariffs.
“The Chinese want to move their manufacturing facilities to Myanmar. Mainly, businesses from China want to set up base in Thilawa Special Economic Zone, which has been equipped with necessary power and transport infrastructure for ease of doing business,” said U Than Aung Kyaw.
“We should be prepared to respond quickly to these enquiries as this is a good opportunity for Myanmar to draw foreign direct investments,” he added.
U Shwe Hein, secretary of the Thilawa SEZ Management Committee, said the SEZ hopes to draw more Chinese companies which can transfer technological know-how to local businesses. “This will be a good opportunity for Myanmar to further develop its economy,” he said.
Out of the 94 companies in Thilawa SEZ, just one, garment manufacturer Lu Thai Co, is from China.
Nevertheless, China remains one of the largest investors in Myanmar, having invested a total of $20 billion in the country over the past 30 years, according to DICA.