Nearly five years after a military coup in 2021 unseated its civilian government, Myanmar has become extremely fragmented. A civil war flared after the coup, killing thousands and leaving upward of 18 million people in need of humanitarian aid. Today, the central government under the military junta effectively controls less than half of the country’s territory. A variety of ethnic armed organizations and other rebel groups jostle for land, resources, and sway, running large regions of the country on their own terms.

Such a fractured political landscape could produce endless instability that might threaten investments in Myanmar or even spill beyond the country’s borders. But China, Myanmar’s most powerful and influential neighbor, no longer fears this fragmentation. Instead, Beijing believes this turmoil is here to stay—and that it can manage the chaos. For much of the civil war, Beijing reluctantly worked with both the military junta and local armed groups near its border while holding out hope for the junta to emerge dominant and unify the country, which would stabilize Myanmar and make it easier for China to operate there. Now, Beijing seeks to actively maintain its influence by simultaneously providing the junta with conditional economic and humanitarian aid and pressuring ethnic armed organizations on its border into compliance. China is using its massive economic leverage to force rival groups to the negotiating table on its terms.

Myanmar’s election, which begins on December 28, is unlikely to produce a democratic transition. Although domestic political parties and local elites hope that the election creates an opening for some loosening of political restrictions, most external observers have already dismissed the elections as obviously unfree and unfair. But leaders in China view the polls as a crucial step toward their goal of managing the country. The election provides an opportunity to formalize a hybrid political system in which the military junta maintains its political authority behind a veneer of civilian administration. Military leaders will retain the symbols of state power, but the elected civilian parliament will process budgets and sign contracts. This will grant China the necessary administrative reliability it needs to invest in projects in Myanmar: whereas the junta’s decrees are fragile because they are subject to leadership turnover, territory loss, or sanctions, civilian-ratified procedures offer more continuity and provide legal leverage for Chinese firms regardless of which local group claims dominance in a part of the country.

The election will not solve fragmentation in Myanmar. Instead, it will help China institutionalize it in a way that reduces risk for itself. Beijing believes it can tolerate a divided Myanmar so long as the main power holders remain dependent on China for trade, energy, and administrative coordination. This means that no single group can secure access to key resources, cross-border channels of commerce, or official approvals without running it by Beijing first. Chinese diplomatic, security, and economic agencies support this approach because they believe they have the tools to adjust pressure on competing groups effectively enough to limit the risk that this managed chaos will devolve into wider instability. If this strategy succeeds, it represents a new pathway for China to operate in one of the world’s most volatile countries.

Even before the 2021 coup, numerous ethnic armed organizations ruled various parts of Myanmar. Since then, the civil war has fragmented the country even further. The military junta in the administrative capital of Naypyidaw retains international recognition and occupies most major cities, while strong ethnic armed groups, such as the Arakan Army and the United Wa State Army, exercise de facto administrative, military, and economic control over large, strategically vital territories.

In late 2023 and 2024, a joint military offensive of antigovernment rebels and ethnic armed groups, known as Operation 1027, seized more than 40 major towns and administrative centers. The government’s counteroffensive, which started in early 2025 and was supported in part........

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