When officials first told Chen Ching-feng to remove the Chinese sign above her clothing shop in Myanmar’s biggest northern city, she ignored them.

“When they came back a few days later and asked why the Chinese sign was still there, I said I had been busy,” the ethnic Chinese resident of Mandalay said. “They made me take it down immediately and sign an undertaking not to put it back.”

Other Chinese shop owners report similar requests, but enforcement is patchy.

Government officials in the capital, Naypyitaw, say there is no official ban on Chinese signs, but demands to pull them down in Mandalay, a city dominated by Chinese merchants, illustrate mounting unease over Beijing’s expanding influence.

As Myanmar pursues dramatic political reforms, its relationship with China – the south-east Asian nation’s biggest investor and second-biggest trade partner – is changing. In some cases, long-festering resentment is flaring into the open.

During decades of isolation, the former Burma relied on China as its closest diplomatic and military ally. Wide-reaching Western sanctions put in place after a bloody crackdown on pro-democracy demonstrations in 1988 forced Myanmar to deepen economic ties with China.

But as Myanmar embarks on the road back to democracy, a once-muffled debate about China’s role is growing louder. The reforms are also taking place as the geopolitical rivalry between the US and China has sharpened since President Barack Obama’s administration’s “pivot” towards Asia after preoccupation with wars in Iraq and Afghanistan the past decade.

China’s expanding economic influence was never that popular in a country historically suspicious of foreign powers.

“The government has tried to ban foreign influences before. It seems to be happening again,” said Hu Chieh-chi, a restaurateur in Mandalay, who is an ethnic Chinese and a Myanmar citizen, like Chen.

A two-hour drive away, a grassroots campaign is forming to halt China’s most strategic investment in Myanmar – twin pipelines that will stretch from the Bay of Bengal to China’s western provinces, bringing oil and natural gas to one of China’s most undeveloped regions.

Activists said they were emboldened by Myanmar’s surprise decision last September to shelve the $3.6 billion (R28.1bn) Chinese-funded Myitsone dam under public pressure. US officials said responsiveness to a public demand was a crucial factor in Washington’s historic rapprochement with Naypyitaw late last year.

Much is at stake. Myanmar provides landlocked south-western China with a crucial outlet to the sea. A friendly Myanmar helps reassure Beijing, which is worried about being encircled by the US and its allies, from Japan to Australia and India.

Former political prisoner Kyaw Thiha is clear about what he sees holding back reforms – China.

“This is a democracy. The Chinese ordering us around is not democratic,” said Kyaw Thiha, who will contest an April 1 by-election as a candidate for the National League for Democracy, the party of Nobel Peace Prize-winner Aung San Suu Kyi.

The university history tutor, jailed during the 1988 uprising, wants the government to stop the 790km pipeline project.

Human-rights groups say the pipelines will displace thousands, damage livelihoods of farmers and fishermen, and benefit China more than Myanmar.

To Beijing, the pipelines are a vital energy security asset that will reduce its reliance on shipping through the narrow Malacca Strait. Thousands of Chinese workers have been enlisted to build them.

“We want parliament to stop the pipelines. It was not given permission by the people,” Kyaw Thiha said.

A year ago, such talk was dangerous in a country where critics were regularly locked up by generals who had ruled since a 1962 coup. But reforms led by a year-old nominally civilian government have begun to unwind years of authoritarianism and self-imposed isolation.

Myanmar Energy Minister Than Htay acknowledged public concerns over the pipelines, but said they would be completed on schedule next year.

“We solved each and every problem along that pipeline route, and we give compensation for land use much more than previously,” he said. “I consider all the potential issues that will be raised by the anti-government groups. Every day on the internet I see many groups raise problems and the issues to disturb our project.”

For many in Myanmar, the pipelines embody what is bad about China’s influence – environmental destruction, land grabs, cronyism and accusations of corruption.

Thant Lwin is one of many farmers who simmer with resentment. Chinese bulldozers have sliced his rice-paddy field in half to make way for the pipeline.

“We are facing real hardship because of the Chinese,” he said from his farm near Pyin Oo Lwin. “I would be extremely happy if the pipeline gets cancelled. But I don’t think that will happen. It is not a matter of hating China.”

Venerable Candobhasa, a Buddhist monk whose land was bisected by the pipeline outside Pyin Oo Lwin, scoffed at claims the project, led by China National Petroleum, would bring money and development to affected villages.

“These are our natural resources. We should keep it for ourselves to help us develop, not sell it to China. We don’t have enough power,” he said in his monastery. “The government does not share the money from the pipeline with us. We want to know where it has gone.”

Others appear to be almost chafing for a confrontation with China.

“China is going to be shocked as we, alone among the southeast Asian countries, are going to stand up to them,” said Khon Ja, a human-rights campaigner from northern Myanmar. “We have lots of natural resources, are in a very strategic location, and have a long border with China – more than 2 000km.”

China’s pervasive influence will not be easy to roll back. Though rich in natural resources, Myanmar is one of Asia’s poorest countries. Its new entrepreneurs need the booming border trade and China’s investment money

. And the army needs China’s help to end the unrest along their shared border.

China and its companies pledged more than $14bn of investment in Myanmar’s fiscal year to March 2011, taking total foreign direct investment pledges to $20bn from $300 million a year before, data show.

“Myanmar really cannot afford to damage its good relations with China,” said Lin Xixing, a Myanmar expert at Jinan University in Guangzhou.

In Lashio, a town four hours by car from the Chinese border, the markets heave with Chinese-made goods, and Mandarin is the dominant commercial language thanks to decades of Chinese immigration.

In Myanmar, which has scant industry of its own, even the most basic goods – from laundry powder to soy sauce – are imported from China or Thailand. Competing local products are often more expensive.

The scale of China’s massive economy and well-oiled logistics mean its products can easily overwhelm their local rivals.

On Lashio’s main road to China, trucks rumble by all day. Those from China are packed with refrigerators, televisions, and other consumer goods. Those leaving are clogged with timber, bags of cheap coal and other resources. Smugglers run drugs, jade and gems into China and beyond.

Many wonder whether this will change if Western sanctions are lifted. Could trade with Europe and the US elbow China out?

That’s unlikely, said Aung Zaw Win, who builds machinery in Mandalay.

“China will remain an important market for us. China has well-established supply chains and infrastructure. We cannot substitute for them within the space of only a few years.”

But he is making preparations in case. An American diplomat stopped by recently to ask Zaw Win about the impact of sanctions on his business. A Japanese company inquired about doing business together.

“I am ready for the sanctions to go. I am building a new factory to export to the US and Europe. Some US-made components I cannot buy directly. I have to go to China and get them from street vendors.”

His friend, Sein Win, believes the market will decide who is better for business.

“Everyone knows that US and European products are expensive compared to those made in China. Market forces will talk and we will still trade with China as Chinese goods are cheap.”

Manoj Vohra, an Asia analyst at the Economist Intelligence Unit, agreed that easing sanctions would make little difference initially. “We’re not going to see huge investments by US and European companies immediately, so Myanmar’s dependence on China as a regional ally for economic development and investment will continue.”

But shoddy treatment of local workers by Chinese companies had caused “huge resentment and discontent”, Vohra said. He thought stiffer competition from the West would eventually encourage China to “make the deal sweeter” when doing business in Myanmar. He said that since the Myitsone dam, the message to Chinese investors had changed slightly: “Yes, we welcome you – but you have to do more.”

Chinese have been a formidable presence in Myanmar for centuries.

Immigration swelled during British rule from 1842 to 1948. The end of China’s civil war in 1949 brought another wave of migrants. When the communists expelled the Kuomintang, many fled to Myanmar and Thailand, then fought with the Burmese government before settling in Taiwan.

Those who stayed behind faced brutal discrimination under the rule of General Ne Win, who barred ethnic Chinese and other foreigners from owning land, banned Chinese-language education and stoked anti-Chinese violence.

In Myanmar’s commercial capital, Yangon, memories are still vivid of bloody anti-Chinese riots in 1967. Deadly flames engulfed a school. Shops were looted.

“It was a terrible time. Everything changed for us after then,” said shop owner Wu Yan-shun, whose father arrived in Yangon in 1949. Wu fears the recent political changes could make Chinese vulnerable.

“Relations with China are not so bad now. That could change as Myanmar opens up and there is more debate about ties with China and its influence here.”

In Mandalay, the ban on Chinese advertising revived memories of the Ne Win era.

“

What can you do about it? It’s their country,” said café owner Liu Kui-you.

Bein Nei Tha, a Burmese motorbike dealership worker, laughed when asked why his company also came under the ban, despite having no Chinese ownership. It had used a few small Chinese characters next to an otherwise English-only sign.

“It seems silly,” he said. “I suppose the government wants to limit foreign influence, but why leave the English?” – Reuters