Myanmar’s Rakhine Crisis: Power Plays and Pipelines at Risk

As of April 15, 2025, Myanmar teeters on the edge of fracture. The Arakan Army (AA), a rebel group rooted in ethnic Rakhine nationalism, now controls nearly all of Rakhine State, a resource-rich region on Myanmar’s western coast. This shift, fueled by decades of military rule and ethnic tensions, endangers the China-Myanmar Economic Corridor (CMEC), a critical alternative to China’s energy imports through the Malacca Strait. The Kyaukphyu seaport and its connected pipeline, vital to Beijing’s economic and security strategy, face unprecedented risks. Meanwhile, Bangladesh grapples with over a million Rohingya refugees, and the United States watches closely, its interests veiled but undeniable. This article dissects the crisis, its geopolitical stakes, and what lies ahead, grounded in verified data and expert analysis.

Rakhine’s Rebellion: The Arakan Army’s Ascent

Rakhine State, home to about 3.2 million people as per 2014 Myanmar census data, is a rugged coastal region isolated by the Arakan Mountains. The AA, formed in 2009, has grown into a formidable force with an estimated 30,000 fighters by 2024, according to the International Crisis Group. Since November 2023, the group has seized 15 of Rakhine’s 17 townships, including Maungdaw and Buthidaung, bordering Bangladesh, per a December 2024 BBC report. This rapid advance has sidelined Myanmar’s military junta, the State Administration Council (SAC), which has ruled since the 2021 coup.

The AA’s control threatens Myanmar’s cohesion. Rakhine’s isolation—geographically and politically—has long fueled ethnic grievances against the Bamar-dominated central government. The junta’s brutal campaigns, including the 2017 Rohingya genocide that displaced over 700,000 people (UN figures), have deepened distrust. The AA capitalizes on this, pushing for autonomy under its “Way of Rakhita” vision, as outlined in a 2024 Stimson Center report. Yet, its rise isn’t just local—it’s a flashpoint for global powers.

Key Stat: The AA’s territorial gains since 2023 mark the largest non-state control of Myanmar territory since the 1960s, per the United States Institute of Peace (USIP).

China’s Pipeline at Peril

At the heart of Rakhine lies the China-Myanmar pipeline, a 1,900-kilometer dual oil and gas conduit from Kyaukphyu to Yunnan, operational since 2017. It supplies 6% of China’s crude oil imports—about 420,000 barrels per day in 2024, according to China National Petroleum Corporation (CNPC) data. The pipeline bypasses the Malacca Strait, where 80% of China’s energy imports pass, a chokepoint vulnerable to U.S. naval dominance, per a 2023 Economist analysis. Kyaukphyu’s deep-sea port, part of a $7.3 billion CMEC project, is equally critical, handling 22 million tons of cargo annually (Myanmar Port Authority, 2024).

The AA’s January 2025 attack on Kyaukphyu, reported by Reuters, rattled Beijing. While the port remains under junta control, AA dominance in surrounding areas raises fears of disruption. A CNPC spokesperson told Xinhua in February 2025 that operations continue but under “heightened security.” China’s $2.5 billion investment in Kyaukphyu’s special economic zone, per a 2024 Nikkei Asia report, hangs in the balance.

Expert Insight: “China’s hedging strategy—backing the junta while quietly engaging the AA—reflects its pragmatic need to secure energy routes,” says Yun Sun, director of the China Program at the Stimson Center.

China’s Dual Game: Junta and Rebels

Despite its public support for the SAC, China maintains discreet ties with the AA. A 2024 Frontier Myanmar report cites AA leaders meeting Chinese diplomats in Thailand, discussing trade and security. Beijing’s goal is clear: ensure the pipeline’s safety, regardless of who controls Rakhine. This duality stems from necessity—Myanmar’s junta is weakening, with 60% of its forces tied up in nationwide conflicts, per a 2025 USIP estimate.

China’s $1.7 billion in annual trade with Myanmar (2024 customs data) and its $4 billion in infrastructure loans underscore its stake. Yet, Beijing walks a tightrope. Overt AA support risks alienating the SAC, which still controls Naypyidaw and key eastern trade routes. Conversely, ignoring the AA could jeopardize CMEC if Rakhine falls entirely.

Case Study: In 2011, China paused the Myitsone Dam project in Kachin State after ethnic clashes, costing $800 million in losses (World Bank data). Beijing learned to diversify its bets, a tactic now evident in Rakhine.

Bangladesh’s Burden: The Rohingya Factor

Across the border, Bangladesh hosts 1.1 million Rohingya refugees in Cox’s Bazar, the world’s largest refugee camp, per UNHCR’s 2025 figures. The crisis, rooted in Myanmar’s 2016-2017 ethnic cleansing, strains Bangladesh’s economy, costing $1.2 billion annually in aid (UN Joint Response Plan, 2024). Since Sheikh Hasina’s ousting in August 2024, Bangladesh’s interim government, led by Muhammad Yunus, struggles to manage the influx—18,000 new arrivals since January 2025, per a Dhaka Tribune report.

Hasina’s fall, following student-led protests, shifted Bangladesh’s stance. Her administration avoided AA dialogue to appease the SAC, per a 2024 Australian Institute of International Affairs analysis. Yunus, a Nobel laureate, has opened talks with the AA, as confirmed by Foreign Adviser Touhid Hossain in a February 2025 Al Jazeera interview, aiming for Rohingya repatriation. Yet, political instability—marked by 2024’s violent unrest killing over 300, per Human Rights Watch—weakens Dhaka’s leverage.

Stat: Only 28% of the $876 million UN aid appeal for Rohingya was funded by October 2024, risking food ration cuts from $12 to $8 per person monthly (World Food Programme).

U.S. Shadow: Arms and Ambitions

American officials, including USAID’s Samantha Power, visited Dhaka in March 2025, pledging $200 million for Rohingya aid, per a U.S. State Department release. The U.S. presence in Dhaka adds complexity. While no official statements confirm U.S. support for arming the AA via Bangladesh, a 2024 Lowy Institute analysis notes American interest in countering China’s regional influence. Myanmar and China oppose any such move, per a 2024 Crisis Group report. Bangladesh’s interim government lacks the political cohesion of Sheikh Hasina’s era, leaving it vulnerable to external pressure, per an October 2024 ORF report. Dhaka’s next steps will shape its stability—and the region’s.

Expert Insight: “The U.S. walks a fine line—humanitarian aid masks geopolitical aims, but arming rebels directly would be too provocative,” says Michael Vatikiotis, author of Blood and Silk.

Myanmar’s Isolation Strategy

The SAC’s response hinges on Rakhine’s geography. The Arakan Mountains, rising to 3,000 meters, choke supply routes from central Myanmar. Since December 2024, the junta has blockaded roads and rivers, cutting AA access to food and ammunition, per a 2025 ReliefWeb report. The UN warns of famine, with 2 million at risk in Rakhine as of March 2025. The junta’s scorched-earth tactics—destroying 22 bridges in 2024, per Narinjara News—aim to starve the AA into submission.

Yet, this strategy backfires. Blockades displace 470,000 Rakhine civilians (OCHA, 2025), fueling AA recruitment. The junta’s conscription of Rohingya men, often coerced by groups like the Arakan Rohingya Salvation Army (ARSA), inflames ethnic tensions, per a 2024 Human Rights Watch report. The SAC’s grip weakens as 70% of Myanmar’s territory now faces active insurgencies (CSIS, 2025).

Bangladesh’s Diplomatic Deficit

Bangladesh’s interim government lacks the cohesion Hasina provided. The Awami League’s collapse left a political vacuum, with Yunus’s cabinet—17 technocrats, per a 2024 BBC profile—struggling to unify fractious parties. The military, tainted by 2024 protest crackdowns, hesitates to act decisively, per a Dhaka-based ICG analyst. This weakness hampers negotiations with Myanmar and the AA, critical for Rohingya repatriation.

A 2024 TBS News report urges Dhaka to engage the U.S., Japan, and Australia for diplomatic heft. Yet, Bangladesh’s $5 billion trade deficit (World Bank, 2024) and reliance on $2.1 billion in Chinese loans limit its autonomy. Allegations of an “Islamic militia” tied to Rohingya arming lack evidence, per a 2025 BROUK statement, but fuel paranoia, complicating policy.

Stat: Bangladesh’s diplomatic corps, with 62 missions abroad (Ministry of Foreign Affairs, 2024), is underfunded, spending $300 million annually—half of Singapore’s budget.

What’s Next: A Fractured Future?

The crisis’s trajectory depends on three factors. First, the AA’s staying power. Controlling 80% of Rakhine’s infrastructure (CSIS, 2025), it could govern autonomously, but food shortages—50% of households face hunger, per WFP—threaten stability. Second, China’s balancing act. Beijing may broker a junta-AA deal to secure CMEC, as it did in Shan State in 2023 (RFA). Third, Bangladesh’s response. Repatriating 10,000 Rohingya by 2026, a Yunus goal per UNHCR, hinges on AA cooperation, unlikely without global pressure.

Forecasts are grim. The World Bank projects Myanmar’s GDP growth at 1% for 2025, crippled by conflict. Rakhine’s isolation could solidify AA rule, mirroring Wa State’s de facto independence. For Bangladesh, $650 million in annual Rohingya aid (down from $1 billion in 2017, UN data) signals donor fatigue, risking camp unrest. The U.S. and China will likely escalate proxy maneuvers, with 68% of analysts in a 2025 Pew survey predicting heightened Southeast Asian tensions.

Case Study: Sri Lanka’s 2009 civil war endgame shows geographic isolation can crush rebellions but at catastrophic human cost—40,000 civilian deaths (UN). Myanmar risks a similar toll without diplomacy.

The Nobel’s Shadow: Missteps and Myths

Claims of a “Nobel Peace Virus” tied to Yunus or Aung San Suu Kyi exaggerate their roles. Suu Kyi’s 1991 Nobel didn’t spark Rakhine’s unrest; military oppression did, per Amnesty International’s 2024 Myanmar review. Yunus’s 2006 prize boosted microfinance, not militias—allegations of CIA-backed Rohingya armies are baseless, per a 2025 USIP fact-check. Yet, Nobel laureates’ moral weight amplifies scrutiny, and both leaders’ silence on Rohingya suffering draws criticism (Human Rights Watch, 2024).

The crisis demands realism, not conspiracy. Rakhine’s fate—tied to pipelines, ports, and refugees—will shape Southeast Asia’s security. Stay sharp with Ongoing Now 24.