Trade with China yet to resume after ceasefire in northern Shan State

More than one month after the Brotherhood Alliance of ethnic armed organisations agreed to a temporary ceasefire with the Myanmar military in northern Shan State, border trade with neighbouring China has not restarted, according to local sources. Cross-border commerce came to a standstill after the ethnic Kokang Myanmar National Democratic Alliance Army (MNDAA), the Ta’ang National Liberation Army (TNLA), and the Arakan Army launched an offensive against the junta in the region in late October 2023, dubbed Operation 1027, and lasting through the end of the year. On January 11, the MNDAA and TNLA agreed to a China-brokered ceasefire with the junta in northern Shan State, and launched their administration in towns under their control. During Operation 1027, the ethnic armed organisations seized strategic trade sites, such as Muse’s 105-Mile trade zone, and the border gates at the town of Chin Shwe Haw. “It’s not easy for border trade to start up again. Many people from the 105-Mile trade zone, along with many agents and companies, have relocated to Kengtung, Tachileik and Mongla,” a Muse resident told Myanmar Now, naming three towns in eastern Shan State. The town of Muse, across the Chinese border from Ruili, is still controlled by the junta, which has led to continued tension in the area, he noted. The MNDAA oversees the border crossing at Chin Shwe Haw, where trade has also failed to resume. Damage to transportation infrastructure, such as the roads connecting Mandalay to Lashio in northern Shan State, and from Lashio to Muse and Chin Shwe Haw, has also not been repaired. A trader from Muse who spoke to Myanmar Now on the condition of anonymity said that amid the ongoing instability, few are opting to make the trip to and from the Chinese border. “They are afraid to venture out,” he said. He added that ethnic armed organisations now in charge of the 105-mile commercial zone lack the “trade mechanisms” to run it. “Only small-scale importers are able to bring in some goods by negotiating with armed groups,” the trader explained. He said the owners of small cars have removed the seats and loaded the vehicles with goods in order to transport them along rough forest roads from China into Myanmar. The owner of a fruit warehouse in the trade zone said that of five border crossing points to China, only Lweje in Kachin State and Mongla in eastern Shan State were still accessible. However, the trade volume there was still low compared to the flow of goods that once took place through Muse, the largest trading site. “They are enduring significant costs to use these routes,” the warehouse owner told Myanmar Now. “The expenses are high and the journey is lengthy. It’s not ideal for perishable goods. Yet they still choose these routes and it’s a matter of stubbornly persevering through.” Many former traders have reportedly been forced to give up their businesses and seek out other work amid the current circumstances, he added. “It is no longer the usual short-term clashes. It is not just an unstable situation. The closing of the border gates is not due to a pandemic this time. So it is hard to predict what the situation will be like.” Along the Mongla route, both the junta and the Mongla-based National Democratic Alliance Army impose taxes on goods. The warehouse owner speculated that trade may resume in Muse and Chin Shwe Haw if the military and Brotherhood Alliance members also agree to both tax traders, but he said such a scenario was “unlikely” to be implemented in the upcoming months. Myint Thura, the junta’s director-general of the trade department under the commerce ministry, told Myanmar Now that the issue of the closed border was “being addressed” and that trade was being diverted to other routes, but did not elaborate. According to the figures from the junta Ministry of Commerce, from April 2023 to February 2024, exports to China via five border crossings totalled more than US$1.8 billion, a decrease of more than $227 million compared to the same period in the previous fiscal year.

Trade with China yet to resume after ceasefire in northern Shan State

Traders are being forced to give up their businesses or find alternative routes to China through Mongla in eastern Shan State, locals say

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