June 9: There have been many changes to cross-border timber trade between Burma and China this year with both countries recently supporting attempts to stamp out illegal logging.

Earlier this year, Htoo Trading Company obtained a logging concession in Bhamo district on the China-Burma border in Kachin State. Htoo is owned by Tay Za who is known to have very close relations with senior general Than Shwe.

But the company was too late to profit from the concession as most of the area had already been logged of its precious hardwoods, including teak.

This discovery led to the arrests of many Chinese loggers in the area. Several were murdered. The Chinese government reacted with anger to the State Peace and Development Council’s violence and a high-profile meeting was organised between the two governments to discuss the issue.

The Chinese government decided they would respect the SPDC’s request to only support military-backed logging in Burma, since they thought timber trading would increasingly go through Rangoon.

China’s foreign ministry spokesman Qin Gang publicly requested that “Chinese companies and individuals abide by local laws and regulations” in Burma. At the end of March this year, the Yunnan provincial government, in cooperation with the Chinese People’s Armed Police Force for Border Affairs, declared it illegal for Chinese citizens to enter Burma for mining or logging purposes.

China’s provincial authorities have begun to clamp down on movements across a few of the major southern border crossings to Burma such as the one in Ruili. The Burmese regime has tried to reshuffle border officials to ensure that timber crossing the border does not bypass the Myanmar Timber Enterprise, the commercial arm of the Forestry Department. In early May, thirteen Burmese border-trade officials in Muse were arrested by the military’s northeast command on corruption charges.

But despite these recent crackdowns, some border check points north of Ruili remain active. Two independent Kachin sources and one Burmese relief organisation have confirmed that illegal timber is still flowing across the border.

The Burmese and Chinese governments’ new timber trade policies have allowed them to profit at the expense of Kachin political groups, including the Kachin Independence Organization, and Kachin villagers. Timber is only allowed to pass through Rangoon or through Muse, the only ‘legal’ checkpoint on the China border. This benefits the SPDC by diverting income from ethnic groups into their own pockets, as well as allowing the regime access to more forested territory in Kachin areas.

Ethnic groups with closer relationships with the SPDC, such as the New Democratic Army-Kachin, may also be able to cash in on the ‘legal’ timber trade by asking the SPDC to grant them logging concessions in return for acting as de facto border troops.

Through the new timber laws, the military has been able to increase its control over logging as part of a plan to divide and conquer different ethnic political groups.

Chinese authorities in Yunnan who control trade through Ruili will profit from collecting escalating timber taxes as non-government involvement in the black market timber trade in Burma decreases.

There is only one Chinese company that has a contract with the SPDC to import ‘legal’ logs from Burma.

The Awng Mai Company has also signed a teak logging contract with Burma’s northern commander for the logging of large tracts of forest along Kachin State’s border with China from 2005 to 2009.

The ‘legalisation’ of logging in northern Burma equates to the ‘Burmanisation’ of the country’s natural resources by transforming forests into national or state resources.

The KIO’s finances will be dramatically reduced-precisely the intention of the SPDC. But the KIO will no doubt be able to generate some cash with the help of their China-Kachin cross-border contacts.

They will be able to smuggle cut timber into China by either mixing it with ‘legal’ wood coming through Muse, through the Laiza checkpoint at the KIO headquarters (as is currently the case), or by slipping timber across the border on back roads.

However, the northern commands’ recent directive to stop timber passing through Laiza, in cooperation with Chinese enforcement officers, will certainly add to pressure on the KIO.

The tens of thousands of Chinese migrants engaged in logging and mining in northern Burma are being forced back to China. Some remain despite the danger. Yunnan timber processing plants are starting to fold and they are taking the hundreds of thousands of Chinese migrants they employ with them.

As black market timber profits dwindle and the SPDC increase their grip on the sector, mining will provide a convenient and lucrative replacement.