China’s Role in Myanmar’s Dangerous Jade Trade

Gabriel Walker is a research associate in Asia Studies at the Council on Foreign Relations.

In late October, Global Witness released an important report that systematically explored Myanmar’s jade industry, calling it the “biggest natural resource heist in modern history.” The mining and trade of the gem have been catalogued by journalists, photographers, and authors in the past, but most accounts only mention China’s economic role in driving demand for jade. In reality, a wider range of Chinese actors are directly connected to Myanmar’s jade, some benefiting at the expense of miners and traders, and others suffering from the industry’s unintended consequences. Because of these close, but often overlooked, connections, China has a shared responsibility to take action and advocate for reform of Myanmar’s jade industry.

The jade trade is rife with corruption, conflict, and disease. According to the report, jade production in Myanmar was worth nearly $31 billion in 2014, of which as much as 80 percent was smuggled directly into China, bypassing taxation and border controls in both countries. Companies in Myanmar linked to politically influential tycoons and senior government officials, including the former dictator Than Shwe, hold multiple mining concessions and reap millions as a result. Jade also funds both sides of the ongoing armed conflict in Kachin State, the center of jade production, underwriting the activities of both Myanmar’s military and the Kachin Independence Army/Kachin Independence Organization. An HIV/AIDS crisis also travels hand-in-hand with the gem: Myanmar’s illegally produced heroin flows freely into the main jade-mining town of Hpakant, a place to which tens of thousands of migrants flock hoping to find valuable stones on the margins of the mines. Drug use and prostitution are almost institutionalized there, with a heroin injection offered widely for the same price as a small piece of jade. Payoffs to authorities mean that both dealers and prostitutes operate with impunity. Unsafe practices result in an extraordinarily high prevalence of HIV/AIDS, with reportedly nine out of ten drug-using miners HIV positive.

Chinese players participate on at least three levels of the jade trade:

Beijing is in a position to advance critical improvements in the jade industry by engaging with Chinese stakeholders on multiple levels. The Chinese government in fact has already released conflict-mineral guidelines for Chinese mining companies working abroad, suggesting that it can at least nominally encourage responsible practices on the world stage. But for Beijing to have a real impact in Myanmar, it must stanch illegal smuggling, uncover jade industry–related corruption, and push for greater financial and operational transparency. It would be an encouraging sign for China to step forward to reform the jade trade—if only for this one stone, a symbol of China’s own prosperity—and take responsibility for protecting the welfare of its ailing citizens and regional neighbors.