Assessing Myanmar’s trade dependence on China during the reform period of the 2010s: a sectoral value chain approach

Abstract

Myanmar’s external economic relations during the 2010s can be broadly characterized as processes of re-integration with the outside world, thus paying the way for diversification away from dependence on its preeminent neighbor, China. A close examination, however, reveals a complex set of dynamics in Myanmar–China economic relations, particularly in the trade sector. A sectoral value chain analysis shows that Myanmar’s trade dependence on China rose rather rapidly during the early part of the decade, which was later halted by the lifting of Western sanctions. However, it was also found that the same process that helped Myanmar diversify away from China in the export sector simultaneously increased the country’s dependence on Chinese imports because of newly established global value chains. Overall trends can be explained by considering geographic scale and country positions specific to the value chains of the key export sectors of natural gas, vegetables, and garments. The findings suggest that although the lifting of sanctions was pivotal, the improvement in Myanmar’s diplomatic relations with the West during the 2010s did not linearly reduce the country’s economic dependence on China.