By Phuong Nguyen —

Myanmar experienced a number of firsts over the past week. The Union Parliament — which now counts former political prisoners, doctors, businesspeople, and poets among its ranks — on March 24 approved a new cabinet to serve under the incoming National League for Democracy (NLD) government, the first civilian government to rule the country in over 50 years. In a speech on Armed Forces Day on March 27, Commander-in-chief General Min Aung Hlaing urged Myanmar’s military to cooperate with the incoming government to help fulfill “the country’s fundamental needs of stability, solidarity, and development.”

In the clearest sign that a new era has dawned in Myanmar, NLD chair and former opposition leader Aung San Suu Kyi, who spent years under house arrest during military rule, will play an outsized role in the new government. She will be in charge of the foreign affairs, education, and energy and electricity portfolios, while also serving as a minister in the President’s Office. Lawmakers have started a push to pass legislation that would give her the title of “state counselor.” Aung San Suu Kyi, who is constitutionally barred from becoming president, will need to resign from her parliamentary seat and party leadership post to serve in the cabinet. Yet she will call the shots with the cabinet members — all but three of whom she nominated — and a large swath of the legislature, where her party holds a supermajority.

Being the foreign minister gives Aung San Suu Kyi more than a seat on the supreme decision-making National Defense and Security Council. It also gives her a powerful platform on the international stage from which to voice her views on Myanmar’s priorities and national strategy, and shape the outside world’s evolving views of a country still emerging from decades of international isolation and slowly embracing its regional identity as a member of the ASEAN grouping.

Of particular interest to international observers will be how Aung San Suu Kyi will handle Myanmar’s often difficult relations with China. As one of her first tests on the job, Aung San Suu Kyi will confront two of the most contentious issues in Myanmar’s foreign relations. One concerns the stalled $3.6 billion Chinese-backed Myitsone dam in northern Myanmar. The other is a $14 billion special economic zone concession recently granted to a Chinese-led consortium; the project is strategically located in western Myanmar overlooking the Bay of Bengal.

Outgoing president Thein Sein decided in 2011 to suspend construction on the controversial dam in response to a public backlash against what many in Myanmar saw as China’s economic exploitation of a then-isolated Myanmar under junta rule. The decision angered Beijing, which opted to subsequently give Thein Sein a cold shoulder and place its bet on the next government. Chinese leaders are believed to have raised the prospect of resuming the Myitsone project with Aung San Suu Kyi when she visited China last year, and Chinese Foreign Minister Wang Yi reemphasized as recently as March that China hopes to resolve the current impasse with the incoming government.

For China, leaving the Myitsone question unresolved not only hurts its standing and economic interests in Myanmar, but will also set a bad precedent for future Chinese infrastructure investments in the region and potentially dampen the reputation of its planned ambitious One Belt One Road initiative. Aung San Suu Kyi is in a delicate spot; in 2013, she backed a parliamentary decision to allow a Chinese-invested copper mining project in northwestern Myanmar to go ahead despite widespread local opposition over land conflicts and environmental concerns. She said this message was necessary to reassure potential investors looking to do business in Myanmar.

Meanwhile, the outgoing government’s decision in late 2015 to grant the rights to develop a deep-sea port and manufacturing complex in Kyaukphyu in western Myanmar to Chinese conglomerate CITIC attracted criticism from civil society and the local population, primarily over land and governance concerns. Many who questioned the motivation behind the rush by the military-backed government to award the project have asked whether the NLD government will take steps to either scrutinize or review the concession.

Aung San Suu Kyi has said in public forums that she welcomes the right kind of foreign investment in Myanmar; it remains to be seen how she will walk the fine line between reassuring foreign investors and managing popular anti-China sentiment.

Another area in which China could be expected to step up its involvement is Myanmar’s uncertain peace process. China was an observer to—and crucial stakeholder in—the cease-fire talks that began in 2011 between the government and more than a dozen ethnic armed groups. Although the Thein Sein government inked a cease-fire agreement with seven ethnic armed groups last October, it now falls to the NLD government to configure the next concrete steps for the process. This is especially important as the government-backed and internationally funded Myanmar Peace Center—which was responsible for handling cease-fire negotiations with ethnic rebels—has been dissolved, and future funding for the peace process from the European Union remains an open question.

Chinese foreign minister Wang, in a recent speech articulating the tasks of Chinese diplomacy, highlighted Myanmar’s armed conflict as a test case in which Beijing could play a role in helping resolve international conflicts peacefully through dialogue. It will be important to watch whether Beijing aims for a larger and more official role in supporting the political dialogue that is supposed to take place between cease-fire signatories and the government, and whether it seeks to broker talks between combatant groups on the China-Myanmar border with the military and new government.

It would be remiss to discuss Myanmar’s foreign policy outlook without bringing up Myanmar’s military, or the tatmadaw. While the generals may no longer be in the limelight, they continue to hold considerable military power and administrative control over the bureaucracy as well as vast economic interests across the country, making it extremely difficult to deal with most internal and external issues without their consent or cooperation.

Military commander Min Aung Hlaing has struck a constructive public tone on the democratic transition, but he left little doubt in his address just days before the power handover to the NLD on April 1 that it is the responsibility of the armed forces to “take the lead in the national politics in the same way that the tatmadaw has stood ready in the face of critical situations throughout the history of the country.” It was indeed Myanmar’s long fight against colonization and exploitation by foreign powers that gave birth to the modern principles of Myanmar’s “independent, active, and non-aligned” foreign policy.

While Aung San Suu Kyi is not expected to veer from these principles, the military cannot help but wonder how much leeway it will have with the newly minted foreign minister in shepherding the country’s foreign affairs.

Ms. Phuong Nguyen is an associate fellow with the Chair for Southeast Asia Studies at CSIS. Follow her on twitter @PNguyen_DC.