China and Myanmar have signed a framework agreement to build a new a USD $ 1.3 billion deep-sea Port in the Port of Kyaukpyu in the Bay of Bengal, according to China’s state news agency Xinhua.
It marks the end of months of negotiations between the two countries on the Kyaukphyu Special Economic Zone (KSEZ), a 1,600 hectare-sized free trade area that looks to accelerate trade between China and Myanmar and the wider region.
The framework had been delayed because of Myanmar’s fear that allying itself to close to China would leave it in a debt-trap.
As a result of this, the agreed investment framework has been cut from $7 billion to $1.3 billion.
It is a significant part of China’s Belt and Road Initiative (BRI), Beijing’s $900 billion project that involves building ports and railways from China’s east coast to Europe.
Once completed, the new deep-sea port, a port big enough to cater for Panamax vessels, will give China direct access to the Bay of Bengal.
It will also complement China’s other major infrastructure project in the subcontinent, the rejuvenation of the Pakistani port of Gwadar.
The agreement was signed yesterday by Myanmar’s Minister of Commerce Than Myint, China’s ambassador to Myanmar Hong Liang, Chair of the Management Committee of the Kyaukphyu U Set Aung and President of the China International Trust Investment Corporation (CITC) Chang Zhenming.
Zhenming was quoted at the ceremony as saying: “We hope to be able to contribute to improving Myanmar's national economy by being based here for the long-term and becoming actively involved in the development of the local economy and social sectors.”