Murky borders

In the second of two articles about Sino-Burmese business, Yang Meng travels to the resource-rich borderlands, where everyone from wealthy jade merchants to ethnic nationalists is vying for advantage.

In the second of two articles about Sino-Burmese business, Yang Meng travels to the resource-rich borderlands, where everyone from wealthy jade merchants to ethnic nationalists is vying for advantage.

Traders in the Ruili teahouse call him “Zhao, the Kachin general”. Rough-looking and clad in a worn, brown jacket, he is unlikely to raise any eyebrows walking on the streets of this Chinese border town, an important crossing into Myanmar. And that’s just how he wants it: for his second job, he uses his status as a border resident to travel in and out of China and earn a bit of extra cash.Zhao Shan may or may not be his real name. Business people working around here tend to have three identities, as evidenced by their Chinese identity cards, Burmese identity cards and border residents permits, which they use to pass back and forth between the two countries. They  have three names to match: a Chinese name, used for interacting with the Chinese; a Burmese name that exists only on their identity cards and their “real” ethnic Dai or Jingpo name.

Word has spread among the businessmen milling about the Golden Star Hotel: “Zhao Shan is a Jingpo major general in the Kachin Independence Army [KIA]. He’s got the latest information on the conflict.” There’s also a rumour circulating that a Chinese construction worker stepped on a mine while laying a power line in Kachin state.

A 17-year ceasefire came to an end on June 9, 2011 and the Burmese army and the KIA, an ethnic militia based near the Chinese border, have been fighting ever since. With 135 different groups, Myanmar is one of the world’s most ethnically diverse nations. The fighting makes businessmen working over the border nervous and endangers valuable Chinese investments.

“Once fighting broke out,” Zhao explained, “the KIA announced it would collect taxes from jade merchants at Hpakan and would not recognise the mining agreements signed with the Burmese government. Most firms have had to make up taxes amounting to billions of Burmese kyats. The fighting has been fierce, with 980 separate clashes and casualties on both sides.”

Zhao Shan is just one figure in the murky border world. Rich jade merchants; ethnic nationalists; jumped-up officials of state-owned companies; Burmese students in exile – they’re all here, and they’re all out to get something.

Ruili used to be nothing more than a desolate border town. The locals were the first to start trading across the border, smuggling armloads of watches and other goods back to China. In the 1950s, Myanmar was the richest country in south-east Asia, but half a century of military rule and ethnic conflict rewrote its fate. And meanwhile China has got richer. Ruili is now an important gateway for China’s acquisition of foreign resources.

Ganmo, the 49-year-old head of the Jinghpawland Cultural Exchange Committee, has a distant gaze and a thick beard. “There are one million Jingpo people in the world,” he said. “Of them, 900,000 are in Kachin state and are considered Kachin, and another 90,000 are in Yunnan, where they are known as the Jingpo. I call these areas Jinghpawland.”

Ganmo explained that, growing up, he developed a strong sense of ethnic belonging. He played me a video of him performing an ethnic dance, wearing a headcloth and brandishing a large traditional knife. As we talked, his assistant stood nearby, dressed in the dark-green second world war uniform of the US Army. He pointed to an emblem on the arm of his jacket: “This is the Kachin 101st Troop. During the second world war, the Americans and British couldn’t handle the conditions at Myitkyina, but the 101stcaptured the Japanese positions.”

Ganmo’s other identity is jade merchant. He is currently fitting out a 600 square metre, four-storey mansion in a new area of Ruili, valued at 15,000 yuan (US$2,400) per square metre. The first floor will be a jade trading hall and the second an office for his organisation, while he will live on the remaining two floors. The Jingpo flag – crossed knives on a background of red and green – hangs from the ceiling, while a wall is adorned with a scroll in a mirrored frame, said to be have been a gift from the Qing court.

In 2010, Ruili was granted the right to operate special economic policies. South of the Ruili River, there is only one small patch of Chinese territory, an enclave called Jiegao, surrounded by Myanmar and connected to China only by a bridge over the river. There are no customs checks as you enter Jiegao, only when you cross to Ruili. Although the Burmese government holds official jade auctions in Naypyidaw and only allows exports of the stone by sea, one half of all Myanmar’s jade is taken from Kachin state to Ruili.

Ruili has a population of 170,000 and hosts 40,000 Burmese working in the jade trade. Peng Jue, vice head of the Gems and Jade Association, is another well-known figure in the town. The 47-year-old comes from Rakhine in Myanmar and graduated in history from Yangon University. A warrant was issued for his arrest for his part in the 1988 democracy movement and he fled north to Mandalay. In 1990, Peng arrived in Ruili as a refugee and has not returned to Myanmar for 22 years.

“The Burmese people live under darkness,” said Peng. “We opposed the military government alongside Aung San Suu Kyi, and many of us were arrested. I was lucky to reach China.” He has three stores in Ruili, drives a Cadillac, and is keen to join the Party. “When I first got here, you could be arrested for selling jade. But in 1992, they set up a street for jade trading and we could work in the open.”

The Chinese are at work along the Tengchong–Myitkyina highway. The virgin teak forest alongside is has been felled and sold in Ruili as luxury flooring. In Hpakan, bulldozers belonging to Chinese merchants have flattened hills. The roads in and out of the jade-mining areas have been deeply rutted by jade and timber-laden trucks.

Ruili is now the world’s biggest market for unfinished jade, and it all comes from Kachin state. Peng Jue’s assistant, Xiong Wei, said: “The trade is estimated to be worth 300 billion yuan, but Myanmar only makes 30 billion – the Chinese keep the rest.”

Ruili’s new rich like to buy cars and land. Ke Wencong, deputy head of the local Fujianese Chamber of Commerce, shows off a five-million yuan jade ring, plus a luxury car – complete with vanity plates – parked outside. He has just purchased a six-million yuan villa on an estate popular with Ruili’s wealthy classes (the golf course is right next door) and is building a three-star hotel, due to open in October, on another plot of land he owns.

“When I got to Ruili in 1992, everyone was refugees,” he said. “They tried to get Vanke [a well-known Chinese property developer] to come and develop property here, but Vanke wasn’t interested. Now there are four or five listed property developers working in Ruili, and property sells for 6,000 yuan to 10,000 yuan per square metre. Food is even more expensive than in Kunming.”

China wants to turn Yunnan into a launch-pad for outward investment. Many Chinese firms are already using Ruili as a base from which to make inroads into Myanmar, which has long suffered sanctions. They may bring riches for the locals, but there is also a sense of fear.

Driving along a street of jade merchants, Ganmo rolled down the window of his SUV. Pointing to all the jewellery in the windows and the Mercedes and BMWs parked outside the shops, he turned serious: “How many Chinese people are living off Kachin resources? When I was trading jade in Shenzhen, I told people that the resources of Jinghpawland could support several Shenzhens. Then it was stones and timber, now it’s hydropower and natural gas – and all of it sold to China. China is moving too quickly, and a lot of the Burmese I know are scared.”

Ruili’s road ahead is wide. But no one has yet found time to put in the stop lights.

Yang Meng is a reporter at Bloomberg Businessweek’s Chinese edition, where this article was first published

Part one: Chinese power, Burmese politics

Homepage image by Frédéric Gloor