Myanmar, China seal friendship with loan agreements

BEIJING May 27 (Reuters) - Myanmar and China sealed their friendship with loan and credit line agreements worth more than 540 million euros ($765 million) on Friday, as the former Burma's new president praised the Chinese as a trustworthy, selfless ally.

"China is a friendly neighbour of Myanmar's worthy of trust and has provided vigorous support and selfless help for Myanmar's economic development," Myanmar's new civilian president, Thein Sein, told Chinese Premier Wen Jiabao, state television reported.

Wen said Beijing was willing to provide what help it can to help Myanmar's development and ensure the "smooth progress" of oil and gas pipelines being built across Myanmar into southwestern China, seen as crucial to China's energy security.

Thein Sein and Chinese President Hu Jintao signed nine agreements, including a cooperation framework agreement for a 540 million euro line of credit from China Development Bank to Myanmar's Ministry of Taxation and Finance.

Other loan deals were agreed between various Chinese and Myanmar ministries, while another covered a hydroelectric project. No further details were given.

Thein Sein, a loyalist of the reclusive former paramount leader Than Shwe, is no stranger to China, having met top Chinese leaders in the past in his previous official capacities, including as prime minister.

While Western nations slammed Myanmar's election last year as a sham, Beijing has shown no such concerns.

Hu offered his "warm congratulations" to Thein Sein for his appointment as president after the elections, which Myanmar lauded as the culmination of efforts to return the country to civilian rule.

"I believe your visit to China will be advantageous to increasing our mutual understanding and will write a new page in 21st century friendship and cooperation between China and Myanmar," Hu said, according to a pool report.

Economic relations are already booming.

Bilateral trade rose more than half last year to $4.4 billion, and China's investment in Myanmar reached $12.3 billion in 2010, according to Chinese figures, with a strong focus on natural resources and energy projects.

Diplomatically, China provides Myanmar with crucial cover at the United Nations, fending off calls for tougher action demanded by the West on Myanmar's human rights record.

For its part, Myanmar gives China access to the Indian Ocean, not only for imports of oil and gas and exports from landlocked southwestern Chinese provinces, but also potentially for military bases or listening posts.

In October, China's state energy group CNPC started building a crude oil port in Myanmar, part of a pipeline project aimed at cutting out the long detour oil cargoes take through the congested and strategically vulnerable Malacca Strait. [ID:nTOE60D08W] [ID:nTOE67P06B]

But relations have not all been smooth.

China has frequently expressed its concern at instability along their often mountainous and remote border, where rebel groups deeply involved in the narcotics trade have been fighting Myanmar's central government for decades.

In August 2009, refugees flooded across into China following fighting on the Myanmar side of the border between rebels and government troops, promoting an unusually public show of anger from Beijing towards its poor southern neighbour.

Both sides must "coordinate their management to maintain stability on the border", Hu told Thein Sein, state television said.

($1 = 0.706 Euros) (Editing by Sugita Katyal)