Identifier
Created
Classification
Origin
07CHENGDU290
2007-12-12 09:08:00
CONFIDENTIAL
Consulate Chengdu
Cable title:  

ALONG THE CHINA-BURMA BORDER: WWII, DRUGS, HIV, AND JADE

Tags:  ETRD ECON PGOV SOCI SNAR CH 
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VZCZCXRO9629
RR RUEHGH RUEHVC
DE RUEHCN #0290/01 3460908
ZNY CCCCC ZZH
R 120908Z DEC 07
FM AMCONSUL CHENGDU
TO RUEHC/SECSTATE WASHDC 2691
INFO RUEHOO/CHINA POSTS COLLECTIVE
RUEHCI/AMCONSUL CALCUTTA
RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC
RUEHCN/AMCONSUL CHENGDU 3257
C O N F I D E N T I A L SECTION 01 OF 05 CHENGDU 000290 

SIPDIS

SIPDIS

STATE FOR EAP/CM, EAP/MLS, INR

E.O. 12958: DECL: 12/12/2032
TAGS: ETRD ECON PGOV SOCI SNAR CH
SUBJECT: ALONG THE CHINA-BURMA BORDER: WWII, DRUGS, HIV, AND JADE

REF: A) CHENGDU 124 B) 06 CHENGDU 1205

CHENGDU 00000290 001.2 OF 005


CLASSIFIED BY: James Boughner, Consul General, Chengdu,
Department of State.
REASON: 1.4 (b),(d)



C O N F I D E N T I A L SECTION 01 OF 05 CHENGDU 000290

SIPDIS

SIPDIS

STATE FOR EAP/CM, EAP/MLS, INR

E.O. 12958: DECL: 12/12/2032
TAGS: ETRD ECON PGOV SOCI SNAR CH
SUBJECT: ALONG THE CHINA-BURMA BORDER: WWII, DRUGS, HIV, AND JADE

REF: A) CHENGDU 124 B) 06 CHENGDU 1205

CHENGDU 00000290 001.2 OF 005


CLASSIFIED BY: James Boughner, Consul General, Chengdu,
Department of State.
REASON: 1.4 (b),(d)




1. (C) Summary: Common ethnic linkages, villages that hug or
even straddle the border, a visa-free regime for local
residents, spotty security controls, and corruption appear to
facilitate a wide-open atmosphere in areas along China's border
with Burma. One stretch of road outside the Chinese port town
of Ruili in Yunnan Province is controlled by a local gang that
extorts money from passing motorists. Illicit narcotics are
readily available and inexpensive in Ruili and "underground"
casinos still operate across the border in Burma. The history
of U.S. military assistance during World War II and shared
combat experience, commemorated in a growing number of
well-financed museums, generates pro-American sentiment.
Although officially open to international visitors and a center
for China's ever expanding transportation links with other
countries in the region, southwest Yunnan is still viewed by
Chinese authorities as a highly sensitive border area and a
recent Congen visit was heavily restricted and controlled. End
Summary.


2. (C) From December 3-6, CG, Congenoff, and LES Pol/Econ
Assistant traveled to southwest China's Yunnan Province to look
into cross-border trade issues with Burma and visit sites
commemorating the role of the Flying Tigers and other U.S.
military assistance during World War II. Although our
originally requested schedule was approved by the Yunnan Foreign
Affairs Office (FAO),just prior to the trip the FAO
significantly scaled back our itinerary without explanation and
placed a number of restrictions on it. Specifically, we were
denied permission to rent a vehicle from a car agency (used by
us with FAO approval on many previous occasions including a
recent visit to the Vietnam and Laos borders (ref A)) to drive

into Yunnan from the industrial city of Panzhihua in southern
Sichuan Province. The Yunnan FAO also insisted visits to the
towns of Pianma (site of a recently-opened U.S. P-32 Fighter
museum) and Leiyong (possible site of former graves of Flying
Tigers personnel) were "inconvenient." (Note: Kunming Flying
Tigers Association contacts - strictly protect -- recommended
Leiyong to us, but also indicated to us -- and showed us
photographs -- that it currently hosts a Chinese air base. End
note).

-------------- --------------
--------------
Tengchong: Development of Strategic Transportation Hub
-------------- --------------
--------------


3. (U) Flying into the city of Baoshan from the Yunnan
provincial capital of Kunming, FAO personnel escorted us to
Tengchong, a strategically located city along the former
Stilwell Road and scene of heavy fighting during World War II.
The 168-kilometer drive, only 15 kilometers of which is
currently expressway, took about four hours and went through the
2000-meter-high Gaoligong mountain pass. According to the FAO,
construction of a new expressway between Baoshan and Tengchong
will begin soon, but is likely to take at least four years due
to the difficult topography of the region and will require the
building of what local officials claimed will be the tallest
bridge in Asia.


4. (U) Congen research of local open source information prior to
our trip highlighted the important role Tengchong -- located
just 200 kilometers away from Myitkyina in Burma and 602
kilometers from Mine in India -- can play as China expands its
international transportation link ups with both Southeast and
Southwest Asia. In October 2006, a new highway from Tengchong
to the Burmese city of Banwa was completed and the
Tengchong-Myitkyina Highway is expected to be completed soon
once the 95-kilometer Burmese stretch is finished. As
construction of a highway is also reportedly underway between
Mine and Myitkyina, within a few years it will at least be
theoretically possible to drive from Kunming into India along a
1200-kilometer expressway in just 10 hours. (Note: see ref A
for apparently conflicting views we heard from Yunnan officials
on the practical feasibility of this and other routes during
meetings in April. End note). In addition, the Chinese
government has also already begun construction of a railway from
Dali in Yunnan that will pass through Tengchong on the way to
Myitkyina with the eventual goal of reaching India. To cap it
all off, a new airport in Tengchong, capable of handling Boeing
737s and Airbus 320s, will be completed in late 2008 at a
projected cost of RMB 433 million (roughly USD 60 million).

CHENGDU 00000290 002.2 OF 005



--------------
The Party Welcomes You
--------------


5. (SBU) Tengchong Party Secretary Wang Caichun did his best to
welcome what he claimed was the first visit to Tengchong by
American diplomats since World War II. Wang spoke effusively of
American assistance to China during the war and noted his own
father had worked as a cook for the U.S. military. Wang also
remarked he recently secured RMB 200 million (USD 28 million) to
fund a new museum to commemorate the U.S.-China World War II
alliance. He stressed the importance of educating China's new
generation about how the two countries worked together closely
to defeat the Japanese. Wang appeared to be genuinely moved
when discussing the subject.


6. (C) When asked about China-Burmese border trade, however,
Wang quickly adopted the "Party Line." Unlike some official and
business interlocutors during our April visit to Yunnan (ref A),
Wang went on at length about the "excellent security" of driving
along roads in northern Burma, complimented the Burmese
government for the "professionalism" of its border officials,
and noted he himself had recently driven to Mine in India
without any fear for his safety whatsoever. Drug smuggling at
the border is no longer an issue and Chinese and Burmese
authorities have successfully eradicated all opium poppy
cultivation in the area. When CG quoted the old Chinese saying
of "the mountains are high and the emperor is far away" to ask
if local authorities did not sometimes have a little bit of de
facto latitude in implementing central government policies, Wang
quickly interjected that in Tengchong the "Party is fully in
control of everything."


7. (C) As unfortunately appears to happen all too often on
visits to remote areas in our district, our host later tried to
turn what would otherwise have been a possibly enjoyable banquet
into a raucous bacchanalia. To the noticeable discomfort of our
FAO handlers, Wang became increasing inebriated and at one point
even tried to hold CG's head down and pour a local variation of
grain alcohol "bai jiu" down his throat. Wang also made his
young female assistants stand up and serenade his guests and
offered to arrange a joint "hot springs event" after the
banquet. We diplomatically disentangled ourselves from the
situation and bid an early good night to Wang.

--------------
Commemorating the War
--------------


8. (SBU) The national military cemetery in Tengchong contains
the graves of over 9,000 troops of the Chinese Expeditionary
Army and has two brand new museum structures. A section of the
cemetery also honors 19 American soldiers killed in a 1944
battle -- their remains were returned to the U.S. following the
war -- to retake Tengchong from the Japanese. Somewhat
surprisingly given Party Secretary Wang's plans to invest in a
new war museum, just a few kilometers from the cemetery another
brand new and lavishly furbished museum was just completed in
the village of Heshun, that is being developed into a major
tourist destination. Over 10,000 of Heshun's 16,000 residents
are returned overseas Chinese, mostly from Southeast Asia. The
focus of Heshun's war museum is U.S.-Chinese cooperation, and
pride of place is given to hundreds of military artifacts,
including equipment, photographs, and even some personal effects
(rings, etc.) of Chinese, American, and Japanese soldiers.


9. (C) Given the destruction of Tengchong and brutality of
Japanese troops toward the local population during the war, it
is of course not surprising the exhibits at both the national
cemetery and Heshun museum have a certain "edge." At times,
however, the exhibits seem to go a little bit overboard.
Heshun, for example, has a display containing a war-era Japanese
"vivisection table," which actually looks quite new, as well as
a photograph of what it claims to be a Chinese baby "carved up
for meat" by hungry Japanese soldiers. A mound at the front of
the national cemetery in Tengchong is crudely labeled in
Chinese, "Jap Tomb," and contains the remains of Japanese
officers who we were told proudly were placed there so as to be
"ritually humiliated for eternity." Both sites also
conveniently steer clear of other aspects of Chinese history
that local authorities would not wish to have highlighted, and
no mention is made of the fact that Red Guards looted the
national cemetery during the Cultural Revolution. The Heshun
museum director told us privately a local teacher whose exploits
saving a downed American air crew during the war (commemorated
in an exhibit) was executed in the early 1950's for having had
overly close ties to the U.S. military.


CHENGDU 00000290 003.2 OF 005


--------------
Border Ties, Drugs, and HIV/AIDS
--------------


10. (SBU) The following morning we were hosted by Ruili Deputy
Mayor Wei Gang, an ethnic Dai, who was a far more forthcoming
interlocutor than we had experienced in Tengchong. Wei claimed
Ruili, located in the far southwest of Yunnan's Dehong
Prefecture and sharing a 114-kilometer long border and 28
crossing points with Burma, is China's largest land port. Ruili
is an historic homeland and center of the Dai people who speak a
dialect very similar to Thai. About 60 percent of Ruili's
official population of 160,000 consists of Dai and other
minorities, and in addition the area hosts 40,000 migrants from
other areas of China.


11. (SBU) Ruili's biggest industry is sugar production, with
tourism running second. Another major source of employment is
the jade trade with Burma and over 10,000 local residents are
associated with the jade industry. Wei characterized commercial
traffic with Burma -- mostly agriculture according to Wei -- as
"brisk" and said many people in Ruili maintain close family
relations with their ethnic Dai cousins across the border.
Ruili government web sites claim that Ruili's cross-border trade
reached 2.8 billion RMB in 2006 (USD 374 million). Both Chinese
and Burmese with residency in the border region are issued
passes which gives them visa access to both cross the border and
work on the other side. Burmese work in Ruili mostly as traders
and laborers. Chinese and Burmese-registered vehicles are also
permitted to cross the border.


12. (C) Wei observed that Burmese central government control
over some border areas is weak, but remarked that the city of
Mujie across from Ruili has a relatively strong Burmese official
presence. The Burmese government, however, does not maintain a
consulate or any kind of representative office in Ruili. Ruili
officials have authority to handle routine border management,
but must refer more important issues to Kunming. Wei commented,
however, that his Burmese counterparts in Mujie appear to be
kept on a relatively short leash by their political masters to
whom they refer even relatively minor questions. There is no
official Burmese-Chinese currency exchange in Ruili. Rather,
currency exchange is handled by small-scale traders who are
allowed to operate openly and without heavy regulation. The
current rate is about 200 Burmese Kyat to the Renminbi and there
was a brief speculative spike following political disturbances
in Burma during September.


13. (C) Wei agreed that drug smuggling in the area is a major
issue. According to Wei, security officials in Ruili are
particularly concerned about the involvement of Muslims from
northern Burma in the drug trade, but claimed they are probably
not linked to Chinese Hui Muslims and there are in fact only
about 100 Hui that reside in Ruili. (Note: Wei was probably
undercounting the number of Hui in Ruili, and there is at least
one large mosque in the area. End note).


14. (SBU) Wei noted the spread of HIV/AIDS is an important local
problem and commented that Ruili appreciates the assistance it
receives from international NGO's. Ruili authorities rely
heavily on education in their fight against illicit narcotics
use and HIV/AIDS. Recognizing government propaganda might not
always be the best medium to reach the masses, however, Wei
noted that Ruili is trying to experiment in using local Buddhist
monks to pass the word about the dangers of drug use and make
use of the high level of respect they command within their local
communities. However, he claimed there are only 100 Buddhist
monks resident in Ruili.


15. (C) Informal conversations with locals indicated Ruili's
economy had fallen off significantly in the last year; one
restaurant owner blamed the decline on the closing of casinos
across the border in Burma (see note below),which he claimed
had brought a decrease in the number of free-spending Han
tourists. Others remarked on the obvious decline in the amount
of sex-industry activity on Ruili's streets over the last year
(although there was no shortage of massage parlors and karaoke
lounges).

--------------
Jade: Fujianese and Burmese
--------------


16. (SBU) After our meeting with Wei, our FAO handlers
(apparently intent on keeping us busy),took us on a tour of
Ruili's new officially-designated "Gem Street," where they tried
to convince us to buy jade. As most of the pieces presented by
well-prepped shop owners for our inspection ranged in price
between the equivalent of USD 10,000 to USD 100,000, we politely

CHENGDU 00000290 004.2 OF 005


declined to the noticeable disappointment of one FAO official
who said she would receive a nice "souvenir" from the shop
owners if we actually bought something.


17. (SBU) This time-consuming process, however, did give us some
interesting insights into the jade traffic. Notably, all the
shopkeepers we met were Fujianese who had moved to Ruili from
China's east coast in the 1980s, and freely discussed how
Fujianese maintain virtual control over the Ruili jade industry.
In front of our ever-vigilant FAO hosts, the shopkeepers
stressed their jade jewelry originates from unfinished jade
purchased legally by their families at the official jade auction
held in Rangoon and later fashioned at family-controlled
workshops in Ruili. One storeowner commented most of her
customers are wealthy Chinese from either Beijing or Shanghai.
Another noted she has many customers from Burma, including
government officials, because Burmese are "less skilled" than
Chinese at working jade into finished jewelry. While one of the
Fujianese stressed the importance of Ruili as a jade center, she
also observed that most jade purchased at the Rangoon auction by
Chinese traders is fashioned in workshops in Guangzhou.


18. (C) Not too far from the spic-and-span official "Gem
Street," we spied a warren of older buildings and streets
containing smaller jade establishments run mostly by Burmese.
To the apparent consternation of our FAO colleagues, we made a
beeline for it and were greeted by the numerous Burmese milling
in the area. One young Burmese man from Mandalay came up to
shake CG's hand and after finding out where he was from said
"USA - very good." This elicited thumbs up signs from others in
the crowd. CG exchanged greetings in Arabic with several
Burmese Muslims who told him they had come to Ruili to sell
jade. One FAO handler told CG it would be better to move on as
neighboring construction made the area "unsafe."

--------------
Trying to Get the Real Scoop
--------------


19. (C) Taking advantage of a two-hour "rest break" in our
schedule, we hired a taxi on the street and asked to go up a
scenic tourist road along the border towards the village of
Longdao. Our driver turned out to be a migrant from Sichuan who
was quite happy to share his thoughts on Ruili. He noted drugs
are widely available and cheap in the area, with the current
price for a vial of injectable heroin going for about RMB 80 (a
little over USD 10; he claimed one vial could be used for three
or four injections). The drug trade is controlled by local
gangs. As he talked, a large SUV with Chinese plates pulled out
ahead of us from what appeared to be a dirt road our driver said
led across the Burmese border just 30 meters away. The driver
added that, since China began pressuring the Burmese government
a couple of years ago to shut down casinos in Mujie when Chinese
officials and tourists were losing too much money there,
"underground" casinos have sprung up across the border and are
well-frequented by Chinese tourists. He described the casinos
as "dangerous places" where visitors were subject to robbery and
extortion. We declined his offer to take us to have a look.


20. (C) Following a swing through the "One Village, Two
Countries" tourist site (a small village bisected by the
Chinese-Burmese border and appearing devoid of anything other
than the most basic security controls),our driver stopped
abruptly to talk to a group of four young men playing cards
alongside the road. Getting back in the cab a few minutes
later, he explained he had had to pay a small bribe (RMB 30, or
roughly USD 4) to a local gang that controls vehicular traffic
to Longdao and does not allow taxis to engage in two-way trade
back and forth from Ruili without first paying a fee. We saw
other taxis returning empty from Longdao stop and be inspected
by the young men. This "inspection check point" was located
right between two relatively large Chinese People's Armed Police
(PAP) facilities just a few kilometers away. When we drove
again with the FAO down the same stretch of road later in the
day, the "inspection point" was not visible and the men appeared
to have returned to nearby villages.

--------------
Jiegao Border Trade Economic Zone
-------------- -


21. (C) During an official FAO tour of Jiegao, a border zone
that links Ruili to the Burmese town of Mujie, we were not
permitted to see the gate through which vehicular traffic takes
place and cargo is inspected. The Jiegao People's Armed Police
(PAP) officer on duty, however, did walk us through the gate
that handles pedestrian traffic. He told us daily traffic
through the gate includes about 16,000 Burmese entering China
and 5,000 Chinese going the other way. Although literally right

CHENGDU 00000290 005.2 OF 005


at the border demarcation line, we did not see any Burmese
customs or inspection officials. The FAO and PAP appeared less
than pleased when their group photo taking session with us was
interrupted by colorfully-attired Burmese transvestites who
wanted to join in. Apparently, the Burmese earn money from
Chinese tourists by posing with them for photographs. Congenoff
later saw in Ruili advertisements posted in Chinese for "Ladyboy
Shows" in Burma.

--------------
Wanding
--------------


22. (SBU) En route the next day for departure at the airport in
Mangshi, we stopped by the border crossing point at the small
town of Wanding (population about 6,000) located 24 kilometers
from Ruili. The only cross-border traffic visible was a beat-up
sedan with Burmese plates and a man carrying a sack of produce
entering China. The Wanding River (which forms the border
there) appeared to be only a few feet deep and five or six feet
across at most. A local government official told CG that only a
few hundred people cross the bridge each day. When asked by CG
why Ruili's border trade was so much more dynamic, the man
laughed and replied, "Here in Wanding we enforce government
regulations and collect taxes." From the expressions on their
faces, his comment appeared to give our hovering FAO escorts yet
another opportunity to be "not amused."

--------------
Comments
--------------


23. (C) Our tight Yunnan FAO escort throughout the trip appeared
to be in sharp contrast with the much more flexible treatment
given to Congen personnel during a visit to the area in 2006 to
look into anti-trafficking issues (ref B). It is possible this
was due to the reported increase in the flow of drugs across
China's total 2,200-kilometer long border with Burma. In
comments reported in an October 2007 edition of "Yunnan Legal
News," the deputy director of the Yunnan Higher People's Court
noted: "Yunnan's drug trafficking is still very serious; more
traffickers from abroad and other provinces are committing
crimes in Yunnan; the number of ice-drug (methamphetamine) users
has greatly increased; and more armed drug trafficking has
occurred."


24. (C) Despite the restrictions they tried to impose this time,
however, our FAO officials appeared amiable enough and gave the
impression that our handling was "just business, not personal."
Neither of the two Kunming FAO officials who traveled with us
throughout were Han Chinese. One was Dai and was an expert on
Laos who had served several years at the Chinese Embassy in
Vientiane. The other was of the Bai minority people. Both
indicated they were Buddhists and took time to perform religious
devotions at a Buddhist temple we visited outside of Ruili
(although the Bai official later claimed that as a Party member
she recognized any form of religion as backward superstition,
and spoke proudly of having been "sinicized"). In addition to a
large seated Buddha, the temple displayed pictures of both
Chairman Mao and the King of Thailand.
BOUGHNER