Border Trade With China Dented by Kokang Clashes

By Kyaw Hsu Mon 16 February 2015

RANGOON — Cargo through the Burmese border town of Muse has declined in recent weeks, with traders saying both recent fighting in northeast Burma and the coming Chinese New Year are to blame.

Clashes in Laukkai Township first erupted between an ethnic Kokang armed rebel group and government troops on Feb. 9, and by Friday state-run media reported that at least 47 Burma Army soldiers had been killed.

Though the Muse route plied by trucks laden with imports and exports is not in the current conflict zone, the number of trucks from Rangoon and Mandalay has been down, traders say.

Muse is Burma’s largest border crossing and its main gateway to China. Some 900 trucks cross into China daily, while about 500 trucks head in the other direction. Though Muse lies about 60 miles northwest of Laukkai, truck drivers are taking precautions amid increasing concerns over the safety of the route.

Thein Paing, a fish trader whose goods are transported overland from Rangoon to Muse, said drivers have decided to stop in the cities of Kyauk Me city or Lashio in recent days due to security concerns.

“Trucks from Mandalay and Rangoon usually go directly to Muse, but in recent days, they’ve stopped and slept at Kyauk Me or Lashio because they think something might happen with government troops or ethnic armed forces moving their troops from one place to another at night,” he said.

“Nothing has happened yet in this area, but truck drivers are concerned for their security in any case.”

The fighting in Laukkai has resulted in the displacement of thousands of civilians who have fled to Lashio, northern Shan State’s largest city, and Mandalay.

Thein Paing said the violence was not the only reason for the slowdown in trade.

“It is true, the numbers of trucks from Rangoon and Mandalay to Muse has decreased this month, but the fighting is not the only factor; Chinese New Year preparations in border areas are also a major factor,” he said, adding that low market prices for produce and a recent seizure of Burmese rice exports by Chinese authorities were further discouraging traders.

The Chinese New Year falls on Thursday this year. The holiday and the lead up to it commonly brings a slowdown in cross-border commerce for China and its trading partners.

Burma’s major exports are agriculture products. Textiles, tobacco, alcohol, electronics and precursor chemicals used in illegal drug production in Shan State are Burma’s major imports from China.

Yan Naing Tun, deputy director general of the Ministry of Commerce and leader of a so-called mobile team tasked with rooting out smuggling, acknowledged that the number of trucks from both countries has dwindled in recent days, but said the downtick was due to Chinese New Year preparations.

“These days, trucks from both Myanmar and China have declined through the border check points—only about 1,200 trucks, down from around 1,500 per day in the past,” he said.

“I can say that security along the Muse route is still OK, but the reason for fewer truck entries is due to the Chinese New Year,” the official added.

Yan Naing Tun said trade had come to a halt at an official border crossing in close proximity to the recent hostilities.

“There is a trading checkpoint called Chin Shwe Haw in the Laukkai area, but there is no mobile team there and the trading is also stopped there now,” he said.

Burma has four official border crossings with China.

“I believe that it will be back to normal condition at the Muse-Ruili border point after the Chinese New Year at the end of this month,” Yan Naing Tun said.

In addition to being the artery for hundreds of millions of dollars in legal trade, the Mandalay-Muse border route is also a major point of transit for smuggled goods. Mobile government teams tasked with curbing smuggling along the Burma-China border near Muse have seized illicit goods with an estimated total value of US$27 million over the past two years.