The Tamesis
January 26, 2026
MANDALAY – At the bustling jade market in Mandalay, Myanmar’s traditional trading hub along its commercial corridor with China, the ruinous economic effects of a protracted civil war may not be immediately obvious.
The dense cluster of low buildings and open-air stalls is thronging with activity. Burmese dealers, mostly from the northern Kachin state where most of the world’s high-quality jade is mined, jostle for their turn in front of trading counters. Chinese brokers shine LED torches and peer through magnifying glasses to appraise items from uncut stones to finished pieces of jewellery.
Most of the Chinese brokers relay their every move via live stream on mobile e-commerce platforms, hoping to instantly resell their new acquisitions to secondary buyers at home at a healthy mark-up.
Despite appearances, jade traders concede it has been a turbulent time for business.
Since Myanmar’s military and ruling Senior General Min Aung Hlaing seized power in a coup in February 2021, nationwide resistance and intense armed conflict involving ethnic armed organisations have significantly disrupted the main overland trade corridor linking Myanmar’s jade markets with its Chinese buyers. A devastating 7.7-magnitude earthquake in March 2025, its epicentre just 20km north-west in Sagaing, has only served to compound logistical difficulties.
But jade traders hope the ongoing Myanmar general election – which will have its third and final phase on Jan 25 – could help stabilise the security situation, especially if the Chinese government could exercise its diplomatic influence and act as a guarantor of peace.
Beijing certainly has an interest in fostering greater stability in Myanmar. After an initial period of wariness in response to the coup, Beijing has thrown both military and political support behind the Myanmar junta and pushed for the regime-held election, while exerting pressure on resistance forces to hold their fire.
China holds multibillion-dollar infrastructure investments in Myanmar, including highways, oil and gas pipelines, and a stalled deep-sea port project in western Rakhine state that would give China strategic connectivity to the Indian Ocean.
Myanmar has also quietly become China’s largest external supplier of rare earths, providing a key piece of the puzzle that has entrenched Beijing’s dominance in global supply chains. The minerals, vital in the production of just about any modern-day advanced electronic technology, traverse the same well-worn – and battle-scarred – route alongside the centuries-old jade trade.
The stabilising of these cross-border trade routes vital to its own strategic interests underpins Beijing’s diplomatic calculus.
“China is playing between the ethnic armed organisations and the military. It wants the military to pivot into something that internationally is seen as more legitimate,” said Mr Jason Tower, senior expert at the Global Initiative against Transnational Organised Crime and former Myanmar country director at the United States Institute of Peace.
“It wants to bring it into the fold of international organisations, particularly Chinese-led ones. And it wants to push for a form of stability that will give advantage to its economic projects in the country.”
Mr Tower added: “Min Aung Hlaing may not be the most strategic person, but Beijing sees him as someone they can work with.”
“And so, at the end of the day, China’s really looking to try to ensure that the balance of power is tilted in his favour.”
Myanmar’s junta-run election is widely regarded as lacking credibility as the conditions for a free or meaningful vote are absent. The country remains torn by war, with vast tracts of territory outside of the junta’s control. The vote covers less than half the country’s geographic area, excluding millions of displaced citizens from participating.
Major political parties linked to the pre-coup civilian government have either been dissolved or barred from politics altogether. This includes the National League for Democracy, whose landslide win in polls held in 2020 triggered the coup, and whose leader Aung San Suu Kyi remains imprisoned.
Mr Tom Andrews, the United Nations special rapporteur on human rights in Myanmar, said on Jan 24 that the world must “utterly reject” the country’s “sham” election, which he said amounted to “military rule dressed up in civilian clothing”.
Ahead of the final phase of the election to be held on Jan 25, the military junta has already proclaimed the process a success. The military-backed Union Solidarity and Development Party (USDP) won 86 out of 100 contested seats in Parliament’s Lower House in the second phase of voting on Jan 11, according to official figures.
That gives the USDP a combined 182 seats from the first two phases of the election, more than half of the 330-member Lower House, even before the final round of voting. In 2020, the USDP won seven Lower House seats.
Even by the junta’s own figures, the headline turnout figure for the first phase was significantly lower at 52 per cent compared with the previous election’s 70 per cent.
Urban centres such as commercial hub and largest city Yangon have reported lower turnouts. At several polling centres in downtown Yangon for phase two voting on Jan 11, The Straits Times witnessed only sparse crowds trickling in to cast their votes.
In the lead-up to the election, the junta has consistently reiterated the need to revive the China-Myanmar Economic Corridor, stating that Beijing-backed megaprojects “must succeed”. In December, the junta criminalised opposition to any government-approved projects, seen as a move to further silence any resistance to Chinese-backed projects.
“The successful conduct of these elections reflects the agreements and cooperative efforts between Myanmar’s acting president, Senior General Min Aung Hlaing, and Chinese President Xi Jinping,” Chinese special envoy Deng Xijun, who travelled to Naypyitaw as leader of Beijing’s official election observer delegation, was quoted as saying on Dec 29 by junta mouthpiece Global New Light of Myanmar.
China’s political support for Myanmar’s junta is in stark contrast to its early strategic posture towards the military regime that seized power on Feb 1, 2021. And while China did not back the coup, it has backed regime survival when its collapse became plausible.
Chinese brokers shine LED torches and peer through magnifying glasses to appraise items from uncut stones to finished pieces of jewellery. PHOTO: THE STRAITS TIMES
Beijing initially withheld diplomatic engagement, viewing the coup as a destabilising force that could jeopardise its own strategic and economic interests, including the rare earth trade.
China was also particularly dissatisfied with Gen Min Aung Hlaing’s lack of cooperation in addressing one of Beijing’s key concerns: industrial-scale scam centres that were targeting Chinese nationals both as trafficked forced labour as well as victims of financial fraud.
Beijing went so far as to greenlight a major 2023 rebel offensive known as the Three Brotherhood Alliance’s Operation 1027. This marked a major setback for junta forces that saw it surrender vast tracts of territory, including in areas that hosted major scam syndicate compounds.
The success of the operation, however, proved to be a turning point in Beijing’s calculations. By mid-2024, successive setbacks by the military junta saw it cede control of its regional command in Lashio, the largest town in northern Shan state and a key stop on the China-Myanmar economic corridor. It prompted existential concerns over the military regime altogether, and helped Beijing realise the extent to which Myanmar’s military regime was heavily reliant on transnational criminal actors that were backing scam networks, such as the Kokang Border Guard Forces.
While Beijing had sought to bring the junta to heel, it did not seek to catalyse a disorderly regime collapse that would bring instability to its doorstep and risk a Western-leaning opposition grouping such as the National Unity Government coming to power instead.
“China had been sitting on the fence because it doesn’t like this regime. It was surprised and very unhappy that the coup happened,” said Mr Richard Horsey, a senior adviser on Myanmar to the International Crisis Group.
“It felt that it was in a very good position in the country, it had strategic access, had all these infrastructure projects, the China-Myanmar economic corridor, a strategic kind of connection to the Indian Ocean, and then this coup happened.”
Mr Horsey added: “Apart from anything else, all the conflict meant that China’s big infrastructure projects and connectivity to the Indian Ocean was off the table, but it decided that regime collapse was the worst of the range of possible outcomes.”
The big diplomatic signal came when Foreign Minister Wang Yi travelled to Naypyitaw in August 2024 to meet Gen Min Aung Hlaing. The junta leader then made his first visit to China since the coup, attending a regional summit in Kunming in November that year.
Simultaneously, China provided military support in the form of fighter jets and other equipment, while at the same time applying pressure on ethnic armed groups in the country’s north to halt their offensives, brokering a January 2025 ceasefire between the military junta and the National Democratic Alliance Army (MNDAA), an ethnic Kokang force and key member of the Three Brotherhood Alliance.
China’s most consequential intervention came a few months later. In April 2025, Beijing helped negotiate the MNDAA’s handover of Lashio – the capital of Shan state and its most important commercial hub – back to regime control.
A long-sought audience with President Xi for Gen Min Aung Hlaing followed in Moscow in May 2025, on the sidelines of Russia’s Victory Day celebrations – more than four years after his military regime seized power.
The Myanmar general was then invited to the Shanghai Cooperation Organization summit in Tianjin and invited as a guest of honour at Beijing’s Victory Day military parade in September.
Encouraged by Beijing’s role as guarantor, other regional powers began re-engaging. At the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation summit in Bangkok in April 2025, Indian Prime Minister Narendra Modi joined leaders from Bangladesh, Bhutan, Nepal, Sri Lanka and Thailand in meeting Gen Min Aung Hlaing.
“With China’s diplomatic signal, it not only cleared the way for other countries to step up engagement with Naypyitaw, it increased the rationale for doing so,” Mr Horsey said.
Beijing and Naypyitaw are likely to see the absence of any major violence during the first two phases of the election as a win. Additionally, the timing of Philippine Foreign Affairs Secretary Theresa Lazaro’s visit to Myanmar in her capacity as ASEAN’s special envoy, where she met Gen Min Aung Hlaing for a “warm and constructive exchange of views” on Jan 6, is notable, according to analysts.
“I’m not endorsing the elections,” Ms Lazaro told Reuters. “Even as the Philippines, we are not endorsing the elections, but we’re open to what should come up from these events unravelling before us.”
China is famously the world’s largest producer of rare earths and dominates global processing. But while it has a surfeit of light rare earth elements, it faces domestic constraints in the form of mining quotas and environmental restrictions on heavy rare earth elements such as dysprosium and terbium, essential for electric vehicles, wind turbines as well as cutting-edge military applications.
China actually relies on Myanmar’s rich deposits to complement its own supply to meet global industrial demand. Myanmar accounts for more than half of China’s rare earth imports, reaching more than 90 per cent in years of tight supply, such as 2023.
Like jade, rare earth extraction is concentrated in Kachin state, as well as parts of Shan state – border regions long shaped by ethnic armed control and weak central authority. Exports involve passing through layers of miners, brokers, middlemen and militias, each with a rent-seeking clip of the ticket before crossing into China, where their value multiplies.
Back at Mandalay’s jade market, some traders expressed cautious optimism about the election and the hopes it could lead to improved security conditions.
Despite the turmoil, however, there was a stark reminder of the price-setting power of Chinese demand. Traders said the biggest single factor for the health of the jade market was not in Myanmar, but in China where economic weakness and lacklustre consumer spending were taking a toll.
“The biggest problem, speaking overall, is still the fall in demand from Chinese buyers,” said one trader from Henan province, Mr Xue, who wanted to be identified only by his last name.
