Civil wars may not respect national boundaries. As civil war escalates in Myanmar, its consequences are being felt across the border in unexpected ways. In China’s Yunnan province, the city of Ruili has faced significant economic challenges. Once a thriving hub for trade and industry, the closure of border crossings, the collapse of trade routes, factory shutdowns, and the decline of the jade market have all weakened Ruili’s economic foundation. This article examines how a civil war within one state has profoundly disrupted the economy and social fabric of a neighboring country.
China’s Ruili: Once A Border Boomtown
Located in China’s southwestern Yunnan province, Ruili (瑞丽) is a small but strategically significant city that sits directly on the border with Myanmar’s Shan and Kachin States. Traditionally, Ruili has served as a vital commercial center and transport hub for the China–Myanmar corridor. Its designation as a national port in 2001 marked the beginning of a period of remarkable economic growth, with the city’s GDP growth rate soaring from 8 percent to a peak of 16.9 percent in 2014. By 2019, Ruili’s GDP had reached 14.91 billion yuan (approximately $2 billion), with the core area’s per capita GDP rising to 79,352 yuan ($10,911), significantly higher than Yunnan Province’s average of 47,944 yuan ($6,595) during the same period. Arguably, the city’s prosperity has been deeply intertwined with Myanmar’s relative stability during that period. Yet ongoing conflict in Myanmar, especially following the 2021 military coup and the escalation of hostilities after Operation 1027 in 2023, has severely disrupted this dynamic.
The Shifting Conflict Landscape in Myanmar
Myanmar’s political landscape shifted dramatically following the military coup in February 2021, which ousted the civilian government and plunged the country into nationwide conflict. The coup galvanized the formation of the opposition National Unity Government (NUG) and its armed wing, the People’s Defense Force (PDF), both dedicated to overthrowing the junta. Many ethnic armed organizations (EAOs) also resumed their armed struggles, some coordinating with the anti-coup resistance. Since April 2021, over 2,600 new non-state armed groups have emerged in Myanmar, accounting for 21% of all non-state actors recorded globally by ACLED.
A critical juncture came with Operation 1027, launched in October 2023 by the “Three Brotherhood Alliance”—comprising the Myanmar National Democratic Alliance Army (MNDAA), the Ta’ang National Liberation Army (TNLA), and the Arakan Army (AA). The coordinated offensive targeted multiple sites across northern Shan State, capturing significant territory, including key towns along the China–Myanmar border. Although Muse—the largest land port to China in Myanmar, corresponding to Ruili— remains under government control, it is virtually surrounded by EAOs and remains a strategic target. The military success of the Three Brotherhood Alliance has triggered a major humanitarian crisis and severely disrupted overland trade routes from Ruili to Mandalay. Moreover, Operation 1027 inspired a wave of offensives beyond Shan State, including in Rakhine, Kayah, Chin States, and the Sagaing Region, posing the most significant challenge to the military junta’s grip on power since 2021.
Trade Idle, Labor Constrained, and Jade in Retreat
The escalating conflict in Myanmar has had profound spillover effects across the border, with the most immediate and severe repercussion being the collapse of cross-border trade. Shortly after Operation 1027, three key border crossings linking Ruili to Myanmar – previously accounting for one-quarter of China–Myanmar trade and two-thirds of Yunnan–Myanmar trade – were completely shut down. Although the main checkpoint officially reopened in early 2024, trade remains fragile and heavily restricted. Within Myanmar, widespread fighting has severely damaged key infrastructure, including roads, bridges, and checkpoints, making logistics perilous. What was once a three-day journey from Ruili to Mandalay now requires at least two weeks, with cargo traversing multiple territories controlled by various armed groups, including EAOs, militia groups, government forces, and the PDF. Each checkpoint transition demands toll payments, compounding costs and risks. Consequently, many traders have begun bypassing Ruili altogether, favoring sea routes from China’s coastal provinces such as Fujian and Guangdong directly to Yangon.
The repercussions of Myanmar’s civil war extend far beyond disrupted trade routes. Once a thriving hub for labor-intensive industries, Ruili’s economic vitality was closely tied to Myanmar’s inexpensive labor force and its strategic geographic location. At its peak, the city attracted a steady flow of more than 30,000 people from Myanmar crossing the Ruili port daily, while hosting over 100,000 Myanmar migrants who formed the backbone of its industrial workforce. Industries such as garment manufacturing, food processing, electronic components, and motorcycle production flourished, capitalizing on both low labor costs and Myanmar’s robust consumer demand. Some sectors, particularly electronics and motorcycles, were specifically oriented toward the Myanmar market. For instance, Yinxiang, a Ruili-based motorcycle manufacturer, exported 540,000 motorcycles to Myanmar in 2018, playing a significant role in the local economy.
However, the civil war has fundamentally altered this dynamic. As conflict escalates, Myanmar’s population now prioritizes basic survival, leading to a sharp decline in demand for non-essential goods. Additionally, the Myanmar government has imposed import bans on items such as motorcycles and electronics, citing potential military applications. As a result, once stellar contributors to local tax revenues like Yinxiang were forced to shut down in 2024, marking the end of a vital economic lifeline.
Even industries not primarily targeting the Myanmar market, such as garment manufacturing, have suffered significant setbacks. In early 2024, Myanmar reinstated compulsory military service, leading to strict border controls aimed at preventing mass draft evasion. Currently, only 150 workers from Myanmar are allowed to legally enter Ruili each day. Combined with labor shortages caused by the COVID-19 pandemic, Ruili’s industrial parks, once bustling with Myanmar workers, now operate far below capacity. Reaching Ruili also remains perilous for prospective workers, who must traverse active conflict zones. Consequently, both enterprises and laborers often incur substantial intermediary fees to facilitate their passage. In response to these ongoing uncertainties, some manufacturers have begun relocating operations to other parts of China or Southeast Asia, further weakening Ruili’s already strained economy.
The conflict has also devastated Ruili’s oldest and most iconic sectors: the jade industry. Benefiting from its geographic proximity to Myanmar’s Kachin State—home to some of the world’s richest jade deposits—Ruili has historically promoted itself as the “Gateway of Jade” (翡翠之源). This role is deeply rooted in history. Since the Han dynasty (202 BC–220 AD), jade from Myanmar has flowed into China, with Ruili gradually emerging as the initial entry point and principal distribution hub for jade across the Chinese market.
During periods of stability, raw jade could be transported from Myanmar into Ruili in less than 12 hours by land, supporting a bustling trade ecosystem. Between 2019 and 2021, Ruili’s annual jade transaction volume consistently exceeded 10 billion yuan (approximately $1.37 billion), employing over 100,000 people. The city’s jade markets were vibrant, attracting traders, artisans, live streamers, and investors from across the world. However, since late 2023, transportation bottlenecks, mounting security risks, and the disintegration of state control in Myanmar have sharply curtailed the flow of jade into Ruili. Increasingly, traders have shifted to sea routes through Myanmar’s southern ports, with high-end jade now entering China via coastal provinces like Guangdong, bypassing Ruili altogether. As a result, Ruili’s once-flourishing jade markets have contracted dramatically. Nearly half of the city’s major jewelry trading centers have closed, and in the remaining markets, it is not uncommon to find more vendors than customers. Ironically, much of the jade currently sold in Ruili, the so-called “Gateway of Jade”, is now either old stock or sourced indirectly from Guangdong. The collapse of Ruili’s jade trade symbolizes not only an economic downturn but also the erosion of a historical identity that the city had cultivated for centuries.
Ruili’s Crisis: Is There a Beijing’s Response?
The convergence of trade disruptions, labor shortages, and the collapse of cornerstone industries has plunged Ruili into deep economic uncertainty. Although some sectors, such as the export of daily necessities, have demonstrated resilience, the city’s heavy reliance on political stability in Myanmar is starkly evident. Ruili’s experience highlights how internal conflicts can profoundly affect neighboring economies, even when no bullets cross the border. In a notable move, China sent a ceasefire monitoring team to Lashio in northern Myanmar in late April this year, urging both the MNDAA and the Tatmadaw to adhere to a previously agreed peace deal. There is no doubt that this action has reignited debates over China’s principle of non-interference. However, unlike in the past, when China’s adjustments to this principle were largely seen as motivated by overseas interests, the case of Ruili might indicate that domestic considerations are also shaping China’s approach. Until the outcomes become clear, however, Ruili’s role as China’s southern gateway remains precarious, overshadowed by Myanmar’s ongoing internal conflict and the broader geopolitical uncertainties it brings.
Yaolong Xian
