High hopes for business zone on China-Myanmar border

An ambitious new economic zone at Myanmar’s largest trading point with China will bring new business opportunities for the two countries, officials and residents said at the project’s soft opening in Shan State’s Muse last week.

Around 80 percent of Myanmar’s formal overland trade with China passes through a border point a few miles from Muse, into Ruili in Yunnan province, where Chinese buyers turn raw materials into finished products, or sell them on to China and beyond, and pocket the profits.

Myanmar traders mostly work in markets in Ruili – this new 294-acre zone will include the first purpose-built emporiums on Myanmar’s side of the border. Built by New Star Light Company and supported by the local government, it will challenge the markets in Yunnan and try to bring formal trade to Muse.

Few details about the developer are publicly available. Local people believe it has Chinese backing, though company officials say the owners are Mandalay entrepreneurs. As well as its project in Muse, New Star Light has three mixed-use developments in Mandalay. Officials did not disclose how the projects are funded.

Deputy chair of the Myanmar Rice Federation U Soe Tun said he hoped the new project would bring more trade to Myanmar. “All the markets are on the other side of the border. In the past, we had to take our goods there to sell them, but now we can sell here,” he said.

Currently, Myanmar exports pass through customs in a large dusty yard outside Muse known as the 105 Mile border trade zone, where trucks unload their cargo for officials to inspect, and pay taxes, but there is no dedicated space for them to sell their wares. “We have to gradually bring the market across to our side of the border,” said local businessperson U Thein Soe. “It will be hard, and will take time, particularly for the jade trade. Chinese businesses make a lot of profit by selling illegally imported products from Myanmar.”

Chinese companies also profit from warehousing and reselling legally imported Myanmar goods. Watermelons, for example, are sold in scruffy brown boxes to China, where they are given a face-lift, said New Star Light project director U Ngwe Soe.

“Chinese traders have plenty of big warehouses where they put our watermelons. They change the packing and print two things – ‘Made in Myanmar’ and ‘organic fruit’. Then they send them around the world, and make a big profit.”

The Muse business district will not include warehouses, but will feature a number of commercial zones. It is being built in six phases. The first includes the 192-unit Mingalar Bazaar, which opened last week. It will also include offices, banks, a wholesale centre, an exhibition centre, and specialty shops for gems and jade.

The jade market will only sell finished products, which can either be made in Muse or in towns along the trade route from the mines in Kachin State’s Hpakant, said U Ngwe Soe. It will be competing with markets across the border that sell raw jade smuggled from Myanmar.

“The jade sold in Ruili is illegal. Here we will have a team to help prevent the underpricing of local products,” U Ngwe Soe said. In a bid to attract traders to the area, the company will offer jade sellers a year’s free rent, excluding utilities, he added. “We want to persuade them to come to our legal market.”

Asked about the roaring informal jade trade, U Ngwe Soe said he did not want to comment. “My boss has a saying,” he said, “‘open your eyes and your ears but close your mouth’”.

The project’s second and third phases will include car parking, public parks, commercial space and administration, restaurants, a cultural centre, and hotels, including a 252-room Ibis Styles hotel, to be managed by French group Accor. It will be built around an entire village, whose residents did not sell their land to the company, said U Ngwe Soe.

“It’s a Shan ethnic village,” he said. “The people will have to open traditional food stalls and wear traditional dress, so that tourists can come and study them. This is the company’s idea. We will have to push [villagers] to act like that.”

The fourth phase is a residential development with more than 200 villas and the fifth a “luxurious” residential development with more than 100 houses. U Ngwe Soe said companies can also build warehouses in this area if they buy enough land.

The final phase will include more residential space and the redevelopment of a former runway into a road. The company considered expanding the airport, which can land 19-seater planes, but decided not to, as the site is directly beside the border with China. “We would not want to end up in their airspace,” said U Ngwe Soe.

New Star Light is hoping to open a new international gate between Myanmar and China, and is waiting for government approval. The gate has the backing of Vice President U Sai Mauk Kham, a Muse native, who has called for its expedient opening.

Muse has three border gates – the Nandaw or palace gate for government officials, the Sin Phyu or white elephant gate for cars and trishaws, and the Man Wane gate for trucks. Non-locals cannot cross the border.

“When international tourists or companies reach Ruili, they have to go back to Kunming [in Yunnan province] and fly to Mandalay, then Lashio, then drive to Muse,” said U Ngwe Soe. “When the international gate opens, everybody around the world can come and study the historical places here, and visit Myanmar and China together.”

Source: Myanmar Times

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