A surprise offensive by ethnic minorities in northern Burma has blocked two strategic routes to China, the country’s main trading partner, and is putting pressure on the junta’s revenues, analysts say.
The fighting, which has raged for two weeks in Shan State (north), has displaced nearly 50,000 people, according to the United Nations, and represents the biggest military challenge to Myanmar’s generals since the 2021 coup.
The blockade of key transport arteries in the region has caused prices to rise in markets and is preventing the junta from sending reinforcements to counter the ongoing offensive.
“We haven’t seen any (trucks) since the fighting started,” a resident of the town of Muse on the border with China told AFP on condition of anonymity.
According to this source, gunshots and artillery fire can be heard there regularly.
Hundreds of trucks normally pass through this route every day to export fruits and vegetables to China or import electronic devices, medicines and consumer goods.
In the town of Lashio, about 160 kilometers away by road, residents say they are feeling the effects of the fighting.
“A bag of rice cost 160,000 kyats ($105) before the fighting,” a resident, who also spoke on condition of anonymity for security reasons, told AFP. “The current price is 190,000 kyat (US$125) and if the fighting continues, we will fight for survival.”
Trade in goods from Muse has virtually come to a standstill since fighters from the Arakan Army (AA), Myanmar National Democratic Alliance Army (MNDAA) and National Liberation Army Taaung (TNLA) launched their offensive on October 27.
The city of Chinshwehaw, another important passage to China’s Yunnan province, is also currently closed to trade.
“Affront” to the junta
Last week, the MNDAA released images of its fighters waving their flag at the border. The junta later admitted that it had lost control of the city.
According to the Ministry of Commerce, between April and early November this year, more than a third of Myanmar’s trade volume with neighboring countries, worth $5.32 billion, passed through the Chinshwehaw and Muse border crossings.
About $1 billion of that trade comes from natural gas piped to China via Muse, analysts estimate. However, the black market is not included in these figures.
However, the infrastructure was not affected by the clashes, a spokesman for the Chinese Foreign Ministry said on Friday.
The closure of key land trade routes to China – Yangon’s main ally and arms supplier – is an “embarrassing affront” to the army, noted Richard Horsey, an analyst at the NGO International Crisis Group.
Since the coup, the junta has sought to redirect its trade to neighboring China at the expense of Western countries that have imposed sanctions.
But a prolonged closure of the border would have a “negative impact on Burma’s trade balance, its current trade and on the availability of foreign currency,” noted Richard Horsey.
The junta urgently needs foreign currency to pay for its imports and, according to human rights groups, especially weapons to combat armed resistance to its rule that has grown across much of the country.
Blocked deployments
Losing control of border crossings will be “a pretty hard blow to revenues, but not crippling,” Mr Horsey says.
Of more immediate strategic importance, analysts say, is the military’s loss of control over the routes through which it moves its troops.
“Deploying troops into northern Shan State is becoming increasingly difficult and the army is now using helicopters to send reinforcements to the border area,” Shan State resident Jason Tower told AFP. American Institute of Peace.
He believes the army will have difficulty restoring border infrastructure lost in the last two weeks. Air strikes “risk angering China by destroying critical infrastructure.”