The city of Muse is the administrative center of Muse Township and sits directly across the border from Ruili, Yunnan province, China. The two cities are connected by a road bridge that spans the Shweli River. During World War II, Japan severed much of China's access to the outside world, leaving Muse-Ruili as China's only external supply route. The city's strategic importance has since declined due to limited border activity.

However, several recent developments between Myanmar and China have given Muse newfound relevance. Created in 2006, the 105th Mile Trade Zone has made Muse Myanmar's most important hub for border trade; roughly 70 percent of border trade with China passes through the city. The Myanmar National Highway links Mandalay, Myanmar's second-largest city, and central Myanmar to Muse, where goods and people can easily pass to China. In addition, a 170-kilometer (106-mile) railway connecting Lashio, Myanmar, to Muse is under construction. Most important, the construction of a 3,000-kilometer oil and natural gas pipeline linking Yunnan province to the Bay of Bengal via Muse is under way. This pipeline stands to provide a crucial energy alternative for China, which is trying to end its reliance on energy shipments through the Strait of Malacca.

Security Concerns

Due to Muse's rising significance, Beijing and Naypyidaw have every reason to ensure security along the border without jeopardizing trade or energy routes. But there are several security concerns that threaten to destabilize bilateral commerce and trade.

Ethnically, the border region is variegated, hosting Karen, Kachin and Chinese peoples. Naypyidaw has long been unable to effectively control the region, leaving it susceptible to control by local ethnic militias. In fact, six townships, including Muse Township, are controlled by the Kachin Independence Organization's armed wing, the Kachin Independence Army (KIA), which for decades has fought the Myanmar government for autonomy. Myanmar security forces have been conducting a military offensive against the KIA since June 2011, but they have made little progress toward military victory or toward negotiations. Moreover, Muse is becoming increasingly vulnerable to violence from the ongoing struggle.

Indeed, several attacks have occurred since late 2011. These attacks include hits against military convoys and border checkpoints as well as non-military targets (the KIA have been blamed for such attacks but have not claimed responsibility for them). The military's strategy to counter the KIA involves cutting off KIA supply lines, a tactic that could enable the military to encircle KIA-controlled cities. Naturally, the KIA is trying to break any such encirclement. Both strategies yield the same result: Border access and highways have been compromised, and energy and trade routes have been disrupted accordingly.

Naypyidaw's inability to effectively control the border region, coupled with a lack of natural geographic barriers, has led to the proliferation of drug trafficking. Security crackdowns on the southern routes of the Golden Triangle — the area in Southeast Asia that lies at the borders of Myanmar, Thailand and Laos — have made drug traffickers increasingly reliant on routes from northeast Myanmar into China.

The route from Muse to Ruili is particularly important. From Muse, traffickers can transport narcotics into mainland China as well as into Hong Kong, where they can then access the international market. According to official estimates, roughly 20 tons of narcotics, mainly heroin and methamphetamines, transit this route every year. And like the drug trade elsewhere in the world, violence attributed to conflicts within and among drug trafficking organizations poses a security risk to the China-Myanmar border region.

Both countries have tried to curb the drug trade. China has experimented with building a security fence on the border and with encouraging local farmers to grow alternative crops. For its part, Myanmar also has tried to crack down on the border drug trade, but neither government has made significant progress in this regard.

Political Implications

China will have to contend with an unstable border region because instability directly threatens its interests: secured energy and trade routes. However, diplomatically balancing the KIA and the Myanmar government will be difficult; both Naypyidaw and the KIA are trying to manage China's role in their conflict. For example, the KIA threatened to attack the oil and natural gas pipeline, a tactic they hoped would force Beijing to pressure Naypyidaw to negotiate with the rebels. But continued fighting has undermined Beijing's image as a mediator. China will need to find a way to balance the two sides as it tries to keep its interests secure.

The security issues plaguing the China-Myanmar border likely will persist. The KIA's and Naypyidaw's lack of mutual trust will prevent any breakthrough toward resolving their conflict in the near future. (An eventual cease-fire should not be ruled out.) Drugs have continued to flow across the border despite China's and Myanmar's counternarcotics efforts. Either of these issues could flare up at any time — putting at risk China's energy and trade security.