most analysts working on China and Myanmar interstate relations have recently been concerned with the growing frictions between the two countries and the implications of Myanmar’s close ties with western countries. I want to look at the dynamic from slightly different angle now. so I’m going to talk about links between cross-border economic development between the two countries and what it means for state-transformation especially within China. After more general intro, I will then illustrate some of more thoughts with a few trends in cross-border trade in Yunnan and the border city of Reli. So if you looking for theoretical foundation for studying links between cross-border development and state transformation generally, cross-border development usually placed to the very broad category of globalization, understood as, very generally speaking as expantional social relations across borders . in the debate about economic globalization with regard to the state that those authors who claimed the state can basically who continue to be in control of the economic development .And on the other hand you also have authors talking about the retreat of the state associated with decentralization of state authority trying to lower levels of government and increasingly place specific developments. So it’s not all becoming more similar it’s becoming more locally and local-specific. In reality of course there is a variety of ways in how different actors can utilize the evolving commercial links across borders or what they would like for them to look like.

As one of the aims of the central government is to maintain or expand the control over its territory and periphery in particular. For central authorities this means within states, they will try to shape cross-border developments in the manner that strengthens their state authority over these areas. And they often go back and forth over cycles of de- and re- centralization depending on whether local forces appear to be undermining reinforcing the general goals. Well in Myanmar this mainly means maintaining or gaining controls over the ethnic periphery. In china Centre authorities are at least with regard to Southeast Asia mostly concern with alliances between local authorities and local businesses and whether they are pulling into different directions or pose resistance to central government reform.

From a state-building perspective I think that there are signs that we are currently witnessing around of new recentralization and the recent developments in Myanmar may strengthen the central authority position which therefore also holds the potential of actually strengthen interstate ties between Myanmar and China at the highest level of authority rather than straining them.

Very broadly speaking that there are two different ways of recentralization.One is to provide some formal incentive for local and societal actors to submit themselves to central rule. And the other of course is to wide control restrictions. The new government in China seems to be eagerly pushing forward with reforms and relies on both types of measures we can witness with lots of examples like current anti-corruption drive which is also very important to managing relations between central and local governments is through a new round of tax reform. The tax reform can be read as one component which indicates that central authorities at the moment are trying to regain some form of control. Well the new reform don’t really hold many changes in terms of how many money will available for both sides. It does aim at replacing at least two types of tax that are not collected by local authorities to national tax rolls. This ultimately will also affect and improve tax incentives that many local governments at the moment can still grant to business. With more specifically on Yunnan, central authorities at least for now are still seem to drive more custom-made authority though. They are offering tax relieve and other measures of cross-border trade which is very different to the general trend where they seem to go away from special treatment tie to specific geographical location like these open cities or border economic zones to now particular industrial sectors across the country.

With regard to interstate relations, china’s investment into Myanmar remained state-owned enterprise dominated and is mostly associated with former military government in Myanmar. Reasons for analysts to highlight the declining relations seems partly confirmed in the fact that Chinese investment in Myanmar has fallen sharply. And that form 2013 has also shown that China is no longer Myanmar’s largest donor. China, however, does remain the largest source of imports accounting for roughly $4 billion in 2013. With Yunnan sharing the border with Myanmar, this is therefore rather important figure other than the cross-border investment, cross-border trade is dominated by private business and there is also still a lot of illegal activities everyone knows. So tax evasion directly affects central funds and explains increased efforts to step up legalizing in regulating cross-border trades from central authorities because taxes from cross-border trade actually go into the central funds.

The widening of state regulation even includes petty border trade which remains only of marginal size next to regulating tax for cross-border trade, central authorities have even institutionalized more agriculture cross-border markets that now retain between different located according to national schedule. The larger business involved in private business involved in  cross-border trade are often based on close connections with local authorities and blackening deals with ethnic warlords across the border, they are also often involved with more problematic factors of cross-border trade such as timber and investment into agriculture in Myanmar that has received a lot of criticism recently. This explains central authorities’interest to keep taps on these businesses and to maintain political control over the local authorities despite the decentralization measures and handing out authority to Yunnan to actually help shape the cross-border development.

And so of course security concerns with regard to the fighting between Myanmar forces and Kechen ethnic minority close to China’s border is on the central government’s agenda. Recent development offers new opportunities to rechanneling private or local business to use more in line with maybe central authority’s interests. This is the aim that might chime with central authorities in Myanmar at least successful strategy that will be chosen on the Myanmar side.

Most cross border trades between China and Myanmar goes through the border gates in Reli and Wanting, one of the reasons is that only these two are under relatively stable security control of the Myanmar government whereas ethnic ceasefire groups control the others.

On the Chinese side however, there is another component with regard to Reli’s development history. At least initially private business involved in Timber trade was close connections to the local government played a role in lobbying to open up the cross-border trade. Reli is the only border gate that at the moment for China to open for timber imports from Myanmar and all Chinese business in the sector of course interested in profits and more free trades. Beijing and high levels of provincial authorities are interested in collecting revenue in stability along the borders. So when in 2006, Myanmar and China signed a bilateral agreement to stop illegal cross timber trade or non-government approved timber trade. In another way of interpreting this step is to read it as a measure of Chinese authority’s actually reign in this local business in this region and recentralization.

After the ban on all raw timber exports from Burma has come to into effect in April this year, many people have expressed concerns that it will be difficult to implement without China support.

For the future, therefore it will be interesting if we continue seeing timber processing facilities on the Chinese side of the border or if there will be a switch to may be building them inside Myanmar. Well that in itself will not yet be a good result to protect Myanmar’s environment, it will at least to a certain degree that the power of central authorities to implement the strategies in the border areas is in their control. And whether the aim of protecting the environment is actually true, it may be about actually remaining in power in the first place. So if the centralization will be good thing remains to be seen but at least this kind of proof will be the first step to holding them responsible for future engagement.