The Myanmar town of Kyaukpyu, nestled around a small fishing port on the Bay of Bengal, has the air of a place expecting to get rich soon.
In the market, stalls of seafood unloaded from wooden fishing boats have been joined by stacks of Chinese-made toys and smartphones.
Nearby, cattle graze between building sites as high-rise offices and hotels replace weather-stained bungalows. Fine-dining rooftop restaurants and a golf course underline the sense of transition.
Much of the development, and a jump in land prices, in this remote town of 50,000 people are in anticipation of a gigantic prize: US$10 billion (S$13 billion) to build a deep-sea port and industrial zone, financed by China.
The investment plan has put Kyaukpyu at the centre of a debate in Myanmar and across Asia as to who really benefits from China’s grand Belt and Road Initiative.
“The real danger of the port is that its extreme expense could lead the Myanmar government to take out an unsustainable level of debt,” said Mr Greg Poling, director of the Asia Maritime Transparency Initiative, at the Centre for Strategic and International Studies in Washington. “That… could, in the coming years, lead to a debt trap.”
Those concerns have stalled development since the government chose China’s Citic Group to build the port three years ago.
Citic, China’s first state-owned investment corporation, has proposed taking a 70 per cent stake in the project, with the remainder split between the Myanmar government and a consortium of local firms. The Chinese company would run the zone for up to 75 years and would finance Myanmar’s stake.
Some senior government officials are concerned that the nation may struggle to service and repay the billions of dollars it would need to borrow for the project.
“The amount of interest is quite substantial, and not like the loans we got from the Japanese government – the loans from China are much more expensive,” said Mr Soe Win, a member of the ruling National League for Democracy’s central economic committee.
The Japan International Cooperation Agency is helping to finance a US$3.28 billion economic zone at Thilawa port, south of Yangon.
The Thilawa development has raised further questions about whether Myanmar needs such a large facility in Kyaukpyu or whether it would be a conduit for China, run by Chinese companies.
“If we have a deep-sea port, but it’s not controlled by Myanmar, that’s a problem,” said Mr Ken Tun, founder and chief executive of Myanmar’s Parami Energy, the only local firm to be shortlisted for the development.
One major concern is what happened in Sri Lanka.
In 2008, a joint venture with China began building a deep-water port at Hambantota. When Sri Lanka could not repay the loan for the project, it ended up ceding the port to China for 99 years.
“China is trying to influence political events in Myanmar,” Mr Soe Win said. “What we are afraid of is that we will end up like Sri Lanka.”