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Burmese exports to China have decreased recently following a Chinese government move to freeze hundreds of bank accounts in border regions in an attempt to crackdown on illicit financial transactions across the Sino-Burmese border.
Among those targeted are about 20 Burmese merchants, an unknown number of hundi [money transfer] operators based in the border towns, and many Chinese traders.
“The export of rice and maize to China has gone down by one-third,” said Chantha Oo, deputy-chairman of the Rice Wholesale Centre in Muse, one of the towns affected.
“The Chinese government has have frozen all suspicious accounts – those with a huge flow of cash, including many belonging to Burmese persons, such as hundi operators,” he said.
“The majority of accounts targeted were Chinese-owned – not so many Burmese. This has affected rice and maize exports to an extent, but it is not particularly damaging.”
Merchants in Muse said such a crackdown at the border is not rare, and usually does not have a lasting impact on trade or exports.
According to Tin Hlaing Win, the information officer at the Rice Wholesale Centre in Mandalay: “Transportation fees to deliver goods from Mandalay to the Chinese border have recently gone up. Imported goods have increased and Chinese merchants are buying up exports from Burma at lower prices.”
Burmese merchants who focus on exporting by land across the border invariably rely on hundi operators to transfer their money into China. However, in recent years several cases have arisen where they become unwittingly caught up in money laundering operations.
Burma exports 300,000- 400,000 metric tons of maize per year, mostly via the Muse-Ruili border crossing into China, according to the Myanmar Pulses, Beans & Sesame Seeds Merchants Association. Demand has increased annually since 2009, with farmers nowadays attempting year-round production in the traditional corn-growing areas of northern Shan State, Mandalay Division and the Irrawaddy delta.