As Chinese authorities restrict trade, shortages hit states on China-Myanmar border

Fuel and other commodities have become scarce in Kachin and Shan states since Chinese authorities shut down border crossings used for overland commerce with Myanmar, local sources said. The affected areas are largely under the control of ethnic armed organisations that have been fighting against Myanmar’s military regime, and China has reportedly been heightening trade restrictions along the 1,300-mile shared border to pressure the anti-junta organisations to cease offensive operations. China began implementing border trade restrictions on July 9, less than two weeks after a Beijing-mediated ceasefire broke down between the northern Shan State-based Brotherhood Alliance of ethnic armed groups and the military junta. The collapse of the agreement launched the second phase of the alliance’s ‘Operation 1027’ offensive against military targets in Myanmar, during which the ethnic armed groups continued to capture towns in the border regions. By the time of the one-year anniversary of Operation 1027, which fell last Sunday, trade was restricted at gates all along the border, including in Mongla and the Wa self-administered zone (SAZ) in eastern Shan State and Laiza in Kachin State’s Waingmaw Township, the site of the headquarters of the Kachin Independence Army (KIA), another anti-junta armed group. Kachin and Shan states normally have at least 15 operating border gates on Myanmar’s border with China’s Yunnan province. Around half of these gates are now completely closed, with trade continuing under heavy restrictions at the others, according to a source based in Yunnan Province. Crossings under junta control Despite the ethnic armed organisations’ gains, two crucial sites for border trade remain under the military regime’s control: the town of Muse in northern Shan State and the town of Mongla in eastern Shan State. Severe shortages resulted when both stopped allowing goods to pass into Myanmar from China on October 22, according to traders and other local sources. There are three crossing points in Muse—the Nantaw Gate, Sin Phyu Gate and Mant Wein Gate—through which all imports except food and textiles are now banned, according to an male trader working near Muse who asked not to be named. “The number of vehicles coming down has decreased. We’re facing fuel shortages here and goods are also very scarce now. Additionally, cargo trucks can’t leave Muse for other parts of Myanmar. It’s all been shut down for three days,” he said on Monday. Trucks cannot leave Muse because of the Myanmar junta, which is only allowing passenger vehicles and private cars through and has banned freight vehicles from travelling to Mandalay and other areas inside the country, according to locals. Although exports to China are still allowed, they have slowed significantly due to the fighting that has cut off many trade routes since the resumption of Operation 1027. With no new fuel entering Muse and existing supplies dwindling, local fueling stations have begun to shut down. Petrol cost around 5,000 kyat per litre before the border gate closures, but now prices have risen to 8,000 kyat per litre in Muse and around 10,000 kyat in townships between Muse and Lashio—northern Shan State’s largest city, which has been under the control of an anti-junta ethnic armed group since August. “It's hard to predict: If regular trade stops, everything stops. It will become very difficult. Food is still available for now, but without fuel, nothing can move—cars, motorcycles, everything will stop. We won’t even be able to go anywhere,” he said. Wa territory and northern Shan State: squeezed from both sides Starting from October 24, China has stopped nearly all imports coming through the four border gates on its border with the Wa region in eastern Shan State—a territory governed autonomously by a Wa ethnic political organisation—and is currently only allowing in travellers and vegetable shipments, a local woman said. “We’re only experiencing fuel shortages. Haven't heard about shortages of other goods yet. The Wa authorities have also issued statements regarding commodity prices. Since some daily consumer goods are Wa-produced products, there aren't any shortages yet,” she said. The United Wa State Army—the powerful ethnic armed group operating in the Wa region—issued a statement on October 25 warning against price gouging in the towns of Hopang, Pan Lon, Namtit and in other territories under their control, promising to monitor sellers and take action against those who did not comply. A woman from the Ta’ang Women's Organization (TWO) said that in northern Shan State towns along the Mandalay-Lashio-Muse highway—a crucial route for trade with China now controlled by the Brotherhood Alliance—basic consumer goods are in short supply and prices have skyrocketed. “Commodity prices are far higher than we can afford and people can’t buy enough to eat anymore. From what we’ve heard, some citizens are struggling so much with food that they’ve had go to monasteries for their daily meals,” she said. The autonomously governed Wa territories are located in eastern Shan State, while the Brotherhood Alliance has captured most of the townships in northern Shan State, one of the state’s three other regions, which shares the longest continuous border with China. To prevent supplies from reaching the territories under the control of Brotherhood Alliance forces, the Myanmar military is also restricting the entry of trucks in northern Shan State from the cities of Mandalay and Pyin Oo Lwin. According to locals, the junta’s and Chinese authorities’ blockades have created conditions in which they are ‘squeezed from both sides.’ A man with connections to the Brotherhood Alliance groups Namhsan, northern Shan State—a town currently under the control of the alliance member Ta’ang National Liberation Army—told Myanmar Now that while rice is still available in there are shortages of fuel, cooking oil, and medicine. “The main issue is fuel. If that runs out, the supporters [of the Brotherhood Alliance] will face serious difficulties. If other goods are blocked and have to come from mainland Myanmar, prices will rise. The working class will suffer the most,” he said. Though there is limited supply of goods to northern Shan State from southern Shan State towns like Taunggyi, Yatsauk (Lawksawk) and Kyauk Gu despite the trade disruption, prices are reportedly much higher than normal. Prices vary by area. Before China's border gate closures, low-grade rice cost around 80,000 kyat (US $38) per bag in the region, but now costs between 180,000 and 200,000 kyat (US $86 to $95), according to another local woman in northern Shan State. Paw San Hmwe—a kind of high-grade rice—now costs up to 300,000 kyat (US $143) per bag, the woman said. She added that cooking oil and medicines have also increased in price and supplies are scarce. Moreover, she noted, with the Chinese border closed and no access to trade with central Myanmar, there is also no revenue from sales of locally produced goods like charcoal, sugarcane, corn, and tea. The resulting poverty and the problem of storing tea for the long term have proven to be nearly impossible challenges, she said. Lway Yay Oo, a spokeswoman for the TNLA, acknowledged the challenges, saying that the group is working with locals to seek solutions, including a temporary barter system for exchange of local products. Elsewhere in northern Shan State, Chinese authorities are employing what they call a “five cuts” strategy to apply pressure to the Myanmar National Democratic Alliance Army—a group currently in control of several northern Shan State towns including Lashio, the region’s largest city. The group is made up mostly of Kokang people—members of a Sinophone ethnic community that has lived in what is now northern Shan State for centuries—and is also informally known as the Kokang Army. In addition to holding Lashio, the Kokang Army controls the border town of Laukkai, the largest city in a territory set aside for semiautonomous Kokang self-government. The Chinese government’s “five cuts” include cutting off electric power, water, internet service, supplies including fuel and medicine, and consumer goods like rice. They are also restricting travel over the China-Myanmar border in and near Laukkai. Laukkai is one of five border posts used for bilateral trade with China in northern Shan State, four of which are now under the control of anti-junta forces. In addition to maritime routes, Myanmar conducts trade through 17 border towns with its neighbours: China, India, Thailand, and Bangladesh. The overland trade via these border routes accounts for more than 25 percent of the total value of the country's imports and exports. However, with anti-junta forces having seized most of the border crossings during the junta’s rule, the regime has come to rely primarily on maritime trade. Developments in Kachin State There have also been shortages in Kachin State since border gates controlled by the Kachin Independence Organization (KIO) and its armed wing the KIA shut down on October 18, according to a local man from Laiza, Kachin State where the KIO and KIA are headquartered. “From Laiza and Lwegel [Lweje or Loi Je] items like iron ore, charcoal, timber, and jade can go through. People can’t travel though,” he explained, adding,“From China, items like fertiliser for banana plantations, plastic containers for banana bunches, cement, and construction materials are still coming in. All food and other items are blocked.” The Chinese government has closed all border gates controlled by the KIO/KIA since October 18 after the Kachin armed group refused to accept China's pressure to stop offensive attacks against the military junta. A Chinese diplomatic delegation led by Deng Xijun, a special envoy from China’s foreign affairs ministry, met with the KIO/KIA’s acting chair Gen.Gam Shawng in Yingjiang, Yunnan province on October 17 in an attempt to exert pressure on the group to cease fighting against the military junta. According to a source, the border gates closed because the KIO/KIA did not succumb to the pressure from China to stop offensive operations, and did not notify China in advance about locations they planned to attack. View of the Kan Paik Ti border gate in Kachin State in 2023. (Photo - Myanmar Now)

As Chinese authorities restrict trade, shortages hit states on China-Myanmar border

China reportedly closed border grates used for overland commerce after pressure on anti-junta ethnic armed groups from Beijing to stop fighting with the Myanmar military regime

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