Dragon at the doorstep

Flourishing trade

How ethnic Chinese traders are benefiting from Myanmar's new economic freedom

At Mandalay’s jade market, Yang Lipei scrolled through photos on her iPhone of jade necklaces she recently sold worth hundreds of thousands of yuan. The precious stones are set in worthless copper necklaces as a precaution.

"It makes it harder to steal them when clients look at them," she said.

The market in Myanmar’s second-largest city is a trading hub for jade sold to Chinese traders.

Chinese traders sat along rows of tables, under signs written in Chinese and Myanmar language, examining pieces of polished jade with magnifying glasses and LED flashlights. The sellers were locals. Most buyers were ethnic Chinese. And almost all of the gemstones would end up smuggled to China.

Jade market in Mandalay

As Myanmar’s former military regime has relaxed its grip on power, legal and illegal trade are booming along the porous border with the country’s largest trading partner, China.

The market’s traders like Yang are profiting from the economic strategy more than native Myanmese.

Their ability to talk with Chinese buyers in their native tongue helped Yang and her family become part of the trade network that spirits resources including gems, rice and timber from Myanmar to China – trade that bypasses border guards and health and safety inspectors.

Myanmar’s economic reforms have allowed Yang’s family to rise from destitute refugees to middle class in a half decade, thanks mostly to her lawless trade.

As she scrolled through photos of her jade stones, she answered her iPhone. Her husband had called from a remote mine in Tanai near the Chinese border. He was buying amber to sell to Chinese buyers.

Traders move gems through multiple points along Myanmar’s 2,200-kilometre border with China, which stretches from the Himalayas to the verdant heart of the Golden Triangle. The border is so long, and has so few official customs check points, that smuggling is rampant.

The Southeast Asian nation legally imported US$3.5 billion in goods from China last year and exported US$2.9 billion, according to Myanmar customs. Overall, trade grew by 31.8 per cent from the previous year.

But research shows that illegal trade by far exceeded declared trade. Myanmar exported jade worth US$6 to US$9 billion in 2011 – more than twice the country’s reported exports to China last year, according to a study released last year by the Harvard University Ash Centre for Democratic Governance and Innovation in the United States. Most of the illegal jade went to China.

Myanmar customs recorded just US$34 million in jade exports in 2011, about 0.5 per cent of actual exports.

Jade shops in Yangon and a trader inspecting jade in Mandalay

Yunnan province’s booming economy has created a ripe market for Myanmar’s natural riches. The illegal transport of logs, teak and redwood to Yunnan has boomed in recent years, said Yun Sun, a scholar of Sino-Myanmese relations at the Brookings Institution in Washington, DC.

Despite a Sino-Myanmar agreement to halt the illegal timber trade, 2 million cubic metres of logs were shipped through Ruili – China’s main border crossing – during the first 10 months of 2013, according to data she collected from traders.

An estimated three-quarters of Myanmar’s timber exports – worth about US$5.7 billion – have gone undeclared since 2000, according to the Washington DC-based environmental protection advocacy group, Environmental Investigation Agency. The group said up to 70 per cent of that timber crossed the Chinese border illegally.

On April 1, Myanmar banned raw timber exports, but “the assistance of China will be needed to stem the flow of logs across the land border,” said Julian Newman, EIA’s campaigns director. “The likelihood of this happening seems remote, based on past experience.”

Rice is another commodity that flows illegally across the border. Traders can make up 28 per cent more per kilo of rice if they sell to Chinese traders, who smuggle the food into Yunnan, the Myanmar Times reported in February.

Between 3,000 and 3,500 tonnes of rice cross the border illegally each day, the paper reported.

Chicken smugglers at the China-Myanmar border in Muse. Photo: SCMP

Goods getting smuggled across the Shweli River, that separates Myanmar and China just outside Ruili. Photo: Sinopix

From top left: Chicken smugglers at the China-Myanmar border in Muse. Photo: SCMP; Goods getting smuggled across the Shweli River, that separates Myanmar and China just outside Ruili. Photo: Sinopix; A trader looks at jade stones in the Myanmar capital Naypyitaw. Photo: Reuters; A woman slips through an opening in the fence separating China from Myanmar. Photo: SCMP

A trader looks at jade stones in the Myanmar capital Naypyitaw. Photo: Reuters

A woman slips through an opening in the fence separating China from Myanmar. Photo: SCMP

Chinese officials responsible for border trade have said on condition of anonymity that they are aware of the problems created by a porous border, including smuggling and unregulated migration. The officials said they have pushed the Myanmese border police to improve surveillance.

Myanmar's police have made efforts to fight illegal cross-border trade. "Our government is determined to fight transnational organised crime to promote development, growth and peace," the Deputy Chief of Police Brigadier General Zaw Win said in a statement last year.

Over the last few months, the government has worked on deploying a newly minted forestry police force tasked with fighting the illegal logging and smuggling of timber and wildlife. Some 10,000 illegal loggers were detained between December and March alone, a Ministry of the Environment official told The Irrawaddy magazine.

Yang’s off-the-books trade in jade is not merely a more profitable choice than legal exports. It’s the way business is done in Myanmar, she said.

“If someone doesn’t pay, it’s not like I can go to the police here”

For three years, Yang has legally imported cloth from China’s southern trade hub of Guangdong and shipped it to Yangon. Lorry drivers travel 700 kilometres to Mandalay where seamstresses make longyis, Myanmar’s traditional skirts.

If she has any problems in her legal business, she has no recourse in Myanmar. “If someone doesn’t pay, it’s not like I can go to the police here,” she said.

The rule of law is largely non-existent. Despite political changes since 2011, Myanmar remains one of the most corrupt countries in Southeast Asia. Only Cambodia is more crooked, according to Transparency International’s corruption perceptions index in 2013.

That graft has allowed many Chinese migrants to settle in the country, where citizenship is still difficult to obtain, as immigration officials have been eager to sell residence permits and even citizenship to enterprising migrants.

Yang Lipei: “People from Yunnan come and open cell phone stores, motorbike garages and try their luck in real estate, but they get cheated so often”

Mandalay’s Chinese community was well-established before the arrival of British colonialists in the early 19th century. An old community hall now with LED-lit dragons attests to the community’s long-time presence.

The majority of Chinese migrants to the city, though, arrived during the last two decades. The old community has been replenished by tens of thousands of migrants who previously lived in relative poverty in the mountainous border areas.

The Chinese descend from migrants who fled the Chinese Communist takeover in 1949, the great famines of the 1960s, and the Cultural Revolution.

Yang’s grandfather, a landowner, evaded persecution in Yunnan during the Cultural Revolution. For three generations, the family lived in the lawless border areas, working for militia groups dominated by ethnic Chinese warlords.

Over the last two decades, these warlords have signed ceasefire agreements with the Myanmar armed forces, allowing traders like Yang to move more freely across the country.

Yang bought her citizenship two years ago. She declined to say how much she had paid. Another ethnic Chinese resident said an immigration official asked him to pay 300,000 kyat (HK$2,300) for an identity document. “You might even have to pay for beers, food and entertainment” as well, he said.

When the then-military regime undertook its last census in 1983, it counted 234,000 ethnic Chinese in the entire country. Mandalay-based staffers with the Ministry of Immigration and Population declined to say how many Chinese residents or citizens live in the country.

Zhao Zhenheng, the secretary of the Canton Kongsi, or community hall for ethnic Chinese of Guangdong descent in the former capital Yangon, estimated that about four million ethnic Chinese live in Myanmar. About half a million live in Yangon and another half a million in Mandalay, with the others mostly spread throughout the border areas, he said.

“Most are citizens by now,” he said. But more Chinese are coming in.

"People from Yunnan come and open cellphone stores, motorbike garages and try their luck in real estate,” said Yang as she steered her air-conditioned SUV through the streets of congested Mandalay past scooters and pick-up trucks overcrowded with passengers.

The presence of nouveau riche Chinese affects all aspects of Myanmese society – from education to real estate, said Fan Hongwei, an assistant professor of Southeast Asian studies at Xiamen University in Fujian province, who has written extensively on the community.

“This has created the impression that Chinese dominate the country’s economy”

The cost of living has “escalated and some poor locals are being forced out of the city”, said Fan, who conducted field studies last year. “Traders have benefited most from Myanmar’s reforms and ethnic Chinese dominate trade.

“This has created the impression that Chinese dominate the country’s economy,” he said, adding that anti-Chinese sentiment is already on the rise.

“Chinese are more visible in the agrarian country, because they move into towns, set up shops,” he said.

Locals in Mandalay said they have adapted to the influx of rich Chinese. Pyo Pyo, a local English teacher, whose richest students are ethnic Chinese, said she was learning Putonghua to speak with her new clientele. "Now the Chinese own the city," she said. "Downtown is Chinatown."

Several locals said they resented working for the wealthy Chinese migrants, for their showy cars and downtown apartments.

Over lunch at an upscale Sichuan hotpot restaurant, Yang said she was puzzled by such attitudes. Traders bring business to the country, she said. “We get along well. They are just intimidated by our bargaining skills.”

She now owns a downtown house in Mandalay. A driver ferries her two children to private kindergartens, one to learn Myanmese and another to learn Putonghua.

She is planning her first trip abroad. After a first gambling vacation near the Chinese border last year, she wants her next journey to take her to gamble in Singapore, she said.

Need for power

How a Chinese company lobbies for the construction of Myanmar's largest dam

Play video | 4:06

Social worker Dau Nyoi sat next to her scooter under a tree at the Myitkyina’s Manau Park, where a breeze from the mighty Irrawaddy River plain brought relief from northeastern Myanmar’s midday heat.

For years, the 37-year-old social worker has campaigned against the construction of a massive dam by Chinese Power Investment, a Chinese state-owned company, just a few miles upriver from the park. Next year, she fears, construction could restart.

A shot of the monument at Manau Park in Myitkyina

Children playing soccer at the Manau Park

Anti-dam poster in Myitkyina

Motorcycle on the riverbank of the Irrawaddy

Social worker Dau Nyoi

A shot of the monument at Manau Park in Myitkyina; children playing soccer at the Manau Park; anti-dam poster in Myitkyina; motorcycle on the riverbank of the Irrawaddy; social worker Dau Nyoi

Recalling a recent meeting with the company’s lobbyists, she said she just couldn’t believe what they told her when they praised the dam. "It’s their job to convince us," she said. "It’s not their land they are talking about."

The US$3.6 billion dam could be Myanmar’s largest, if production resumes next year.

With a capacity of 6,000 megawatts of electricity, it would be the largest of six dams in the area to be built by a CPI majority-owned joint venture, and the largest in the Southeast Asian nation.

The Myitsone Dam would flood an area the size of Singapore, displacing an estimated 15,000 people, to provide electricity to China’s energy-hungry southwestern Yunnan province. Once built, transmission lines would take 90 per cent of the electricity generated by the mega-dam and six smaller dams upstream across the border to China. Ten per cent of the electricity generated would stay in Myanmar.

Opponents say the dam project has become a symbol of Chinese exploitation of the country’s natural resources by means of murky deals with the military-dominated government and its cronies. Supporters say it will bring tourists to Myanmar’s rural northeast and much needed electricity to the country where power outages have deterred much-needed investment.

Construction began half a decade ago, shortly before the joint venture agreement was signed during a visit by then vice-president Xi Jinping in December 2009 to the still isolated military regime.

Twenty-one months later, on September 30, 2011, the dam construction was suspended by President Thein Sein, a former general who had just taken off his uniform to serve as a civilian president.

It was the first time Myanmar’s former military regime caved to public pressure in decades, allowing opposition groups to organise nationwide protests, heeding their demands. Justifying the suspension, the former general said his administration "must pay attention to the will of the people".

Myanmar citizens living in Malaysia protest against the dam project

The move angered China in the first public rift between Myanmar and its largest trading partner and military ally. Hong Lei, a spokesman for China’s Ministry of Foreign Affairs called on Myanmar to "protect the legal and legitimate rights of Chinese companies".

Three years on, Myanmar’s government has not been able to solve the dilemma of either adhering to signed agreements or listening to its people.

Groups of people fiddled with Myanmar flags as they were waiting for a motorcade in Myitkyina a day before the South China Morning Post met up with social worker Dau Nyoi in Manau Park. Trucks with soldiers rattled through the city as others armed with rifles watched from rooftops.

Now in his last year in office, the president made the surprise visit to lessen the simmering ethnic tensions at the border province. But people who attended meetings with the former general said the dam, the one topic on everyone’s minds, was not addressed in the closed-door events.

“They've invested so much money in [the dam], they’re not going to give up on it”

"He didn’t want to hear any tough questions," said Ja Seng Hkawn, a local activist, who has met with the president in the past. "That’s why they didn’t allow any at the town hall meeting." Another leading local dignitary who had a private conversation with the president said Thein Sein did not react to his plea to not allow the construction of the dam.

Meanwhile, China Power Investment, continues to push for its resumption. "They’ve invested so much money in it, they’re not going to give up on it," said one staffer in Myitkyina. The company is losing about HK$400 million per year over the stalled project, project manager Li Guanghua said at an event in the capital, Naypyidaw, in December.

A part of these expenses goes to staffers from the company’s local office lobbying local priests, businessmen and social workers to change their minds and approve the project.

Their now years-long presence in Myitkyina has attracted a Chinese restaurant, hair salon and massage parlour next to the CPI local headquarters. Boxes full of brochures and posters on the benefits of hydropower fill its entrance hall.

But the Chinese lobbyists are facing an uphill battle as distrust is widespread. A street-corner away, past a billboard-sized poster against the dam, is the de facto representative office of the local militia group, the Kachin Independence Army. In 2010, a series of 10 bombs struck the dam’s construction site, killing one Chinese worker. The KIA, while blamed by the government, has not admitted responsibility.

Colonel Hkun Nawng, an elderly representative of the Kachin Independence Army with their Myitkyina office told the Post that the construction of the damn was simply not negotiable. "We are not the only ones rejecting the dam, it’s the entire population of Burma," he said, using the country’s colonial name.

The lobbyists have also tried to reach the local population with handout donations.

Many people wear CPI baseball hats in the sleepy city and the villages, where residents displaced by the dam construction have been provided with housing. Calendars featuring the Hoover and Three Gorges dams hang at teahouses and in these CPI-sponsored homes.

Aung Ban, 55, says he harbours no goodwill towards those who gave him his CPI hat and house. He used to be a rice farmer, he said. For generations, his family lived in a home made of straw and wood, working their rice paddy in the lush green hills on the western shore of the Irrawaddy River.

He was one of the first to move from his home when construction started. One day in 2011, his children’s school was bulldozed. Then, he had to yield his paddy to gold miners, who were granted the right to dredge his ancestral land for the precious metal by the government before it ultimately would disappear in the dam’s artificial lake.

Aung Ban and his village

He was offered a new home in a "model village" built by CPI’s local contractor, Asia World Company, run by Steven Law, the son of the drug lord and militia leader Lo Hsing-han, who died last year. The company built two model villages for the first villagers to be displaced by the dam. Residents of eight villages were uprooted and moved to the two settlements.

Aung Min Thar village, Aung Ban's new home, has a suburban feel with its dozen rows of identical two-storey houses featuring a brick-built kitchen ground floor and a wooden upper floor lining a valley 10 miles away from the construction site.

Since 2011, the company regularly delivers bags of rice to households that don’t speak out against the dam. Electricity is free for all, provided by a CPI-built dam upriver.

Despite the free rice and electricity, Aung Ban said he regretted leaving the old village. "We can’t plant crops here, the land is infertile," he said. The father of seven said he had to farm on nearby hills, but rocky soil and lack of irrigation made it almost impossible. He said he now relied on rice deliveries from CPI.

“We are bogged down in destitution.”

Three villages have been moved to Aung Min Thar, said Tu Hkawng, the local Baptist minister, including his own former parish, the 2,000 people of Tang Hpre village. He said his village’s residents had no choice but to move to the model village. "We are bogged down in destitution,"he said. "Here we don’t have land for raising cattle. Nothing can grow here.”

Tu Hkawng said CPI employees have repeatedly visited him, three times last year, to convince him of the benefits of the dam, but he remained adamant. "We don’t get any benefit from their electricity," he said. "Most benefits will go to the Chinese. We will lose our lands, thousands of acres will be flooded and thousands of Chinese workers will come here."

His office desk features yet another calendar, sponsored by CPI, advertising the benefits of dams. "The sufficient water and electric power from the Hoover Dam has led to the creation of Las Vegas, a shining star in the desert," it reads.

Gliding past three unmanned watchtowers, the wooden fishing boat was only spotted by buffaloes bathing in the Irrawaddy on its journey to the construction site, the now unthinkable site of another Myanmese equivalent of the Hoover Dam.

Four massive pillars and an office building are without any sign of activity, but fishermen still don’t dare to approach it. The construction site is a restricted area, protected by private security guards, they say.

A young fisherman steers his boat on the Irrawaddy River towards the dam construction site

Half an hour’s boat ride upstream, where the Mayka and Malika Rivers merge to become the mighty Irrawaddy, "Go away, CPI" signs hang on trees under which families seek shade to picnic.

The Myitsone confluence is one of the mythological original settlements of the Kachin people. It is also where Roman Catholic and Baptist missionaries set up first churches to convert the now majority Christian ethnic group, which is living in a majority Myanmese country.

For the Kachin, the last ethnic group to reject a ceasefire with Myanmar’s government in a civil war that has lasted half a century, the place is sacred.

The same is true for the country’s majority Buddhist Bamar population living in Myanmar’s heartland, where the river is vital to rice farming. In March, hundreds of marchers left Yangon, Myanmar’s largest city, starting a 1,200-kilometre journey along the Irrawaddy’s shore. They plan to rally local residents along the route against the dam.

Kachin pharmacist Ko Gyi Kyaw was one of those picnicking at the confluence. The 28-year-old was drinking Sapi, a pungent, purple alcoholic drink made of fermented rice.

He had gone there to show the confluence to a Bamar high-school friend visiting from central Myanmar. “We want to keep this view forever,” said the 29-year old, pointing to the river.

“The Chinese want to take everything: our woods, our stones, our rivers,” he said, his voice trembling. "But this is our heritage. They can’t buy it."

Fractured unity

How a Chinese copper mine has split Myanmar's opposition

Play video | 2:39

Pictures of Aung San Suu Kyi are virtually everywhere in Myanmar. The Nobel Peace Prize laureate who defied the country’s military junta for two decades adorns walls, car dashboards and key chains, reflecting universal pride in her defiance of the former military regime and in the country’s newfound political freedom.

One poster of the daughter of the nation’s founding father, General Aung San, hangs in a farmer’s home where long-time political activist Maung Maung Latt is hiding.

The 45-year-old is wanted by police for rallying people against the expansion of Myanmar’s largest copper mine – a project endorsed by Aung San Suu Kyi – once the undisputed hero to the opposition – in a move that has split their ranks.

In the farmhouse for the last four months, Maung Maung Latt has risked his freedom to organise protests against the mine.

"Aung San Suu Kyi is the hope of all in Myanmar," he said, visibly uncomfortable with the clichéd praise for the opposition leader. He turned silent.

The awkwardness reflects the new cracks in the once-united front that fought for decades against the military regime that ruled the country for two decades with brutal force.

Long-time political activist Maung Maung Latt

Workers in the village where he is currently in hiding

Long-time political activist Maung Maung Latt and workers in the village where he is currently in hiding

To people like Maung Maung Latt, expanding the Monywa copper mine in Myanmar’s Sagaing Division – a Chinese-backed project – embodies the ruthless cronyism of the former military regime.

Aung San Suu Kyi has said that the agricultural country was in dire need of foreign investment and had to respect the billion-dollar mining contract Myanmar’s former military regime had signed.

Maung Maung Latt tells his fellow countrymen that Myanmar should not respect deals struck by the former regime that has made him spend 11 of the last 20 years in Yangon’s notorious Insein Prison.

He is now wanted on eight charges for inciting unrest. "They still don’t tell the public what they are doing, how much of the benefit goes to the government, the companies and the people," he said, speaking through an interpreter. "We want the project cancelled and to give the land back to farmers."

The mine is jointly operated by Wanbao, a subsidiary of Chinese arms manufacturer Norinco, and the military-owned Union of Myanmar Economic Holdings. Tycoon Tay Za – who made his fortune in timber, construction and tourism, thanks to ties to long-time dictator Senior General Than Shwe – brokered the deal, according to US embassy cables divulged by WikiLeaks.

Shortly before Myanmar’s military eased its grip on power in 2011, officials allowed the mine to expand into nearby Letpadaung hills. As the military eased restrictions on protests, local residents, who once had no recourse when the government snatched their land, began to protest. Some demonstrators clashed with police.

A protesters' encampment burns at the copper mine on November 29, 2012. Photo: AP

Picture taken on December 3, 2012 shows a Buddhist monk who was injured in the crackdown. Photo: AFP

Aung San Suu Kyi talks with crying villagers during a visit to Tone village. Photo: AP

Police officers stand guard at the entrance to the Letpadaung mine. Photo: AP

From top left: A protesters' encampment burns at the copper mine on November 29, 2012. Photo: AP; Picture taken on December 3, 2012 shows a Buddhist monk who was injured in the crackdown. Photo: AFP; Aung San Suu Kyi talks with crying villagers during a visit to Tone village. Photo: AP; Police officers stand guard at the entrance to the Letpadaung mine. Photo: AP

In 2012, a parliamentary commission headed by opposition leader Aung San Suu Kyi negotiated a new contract with the Chinese miners on behalf of the government, raising compensation payments for dispossessed farmers.

“China might think that our country cannot be trusted on the economy”

To the dismay of locals facing the loss of their land and many opposition activists like Maung Maung Latt, Aung San Suu Kyi endorsed the mine’s expansion. China "might think that our country cannot be trusted on the economy," Aung San Suu Kyi told demonstrators near Monywa last year. "We have to get along with the neighbouring country, whether we like it or not."

The protests continued. Farmer Tin Zaw from Ton village, unbuttoned his shirt to reveal bullet scars in his arm and chest. The 42-year-old said police shot him with plastic bullets last April after he joined hundreds of fellow villagers who clashed with authorities when police tried to forcefully claim their land.

A year later, Maung Maung Latt is one of six activists left organising protests against the mine expansion. He hides in some of the 26 villages facing land grabs.

The Chinese miners promise guaranteed jobs for every household that yields land, as well as health care and education. But activists have also said they do not trust the miner's promises. “The locals lose their land, but they won’t get the benefits,” said Myint Aung, a Mandalay-based activist.

Naw Ohn Hla, a prominent campaigner against land grabs, said too that the compromise Aung San Suu Kyi negotiated had not added credibility to the miner's promises.

Once a month, hundreds of activists and local farmers join a protest march to the mining company’s offices. They pass posters praising the mine’s benefits, until barbed wire outside the mine stops their path.

“There is an invisible hand behind them. Why are they there? Who supports them?”

Several leading members of Aung San Suu Kyi’s political party, the National League for Democracy, showed no sympathy with those refusing to accept the compromise their party leader had negotiated.

“There is an invisible hand behind them,” said Nyan Win, a senior party member and close confidante of Aung San Suu Kyi, referring to local activists. “Why are they there? Who supports them?”

In next year’s general elections, the party will for the first time in two decades back a serious challenge to the ruling Union and Solidarity Party, a civilian offshoot of the former military regime.

For Nyan Win, the opposition needed unity to bring about a change in government.

Recalling a recent visit to Shanghai, he pointed to the benefits of economic development. Continuing to oppose the mine was irresponsible, he said. "We are a bordering country [to China]. We need their friendship," he said.

About an hour’s drive north from the village where Maung Maung Latt is hiding, the prosperity of Don Taw village is a testament to the progress that Nyan Win envisioned.

Picture taken on August 31, 2013 showing a worker walking by pools in a mining waste dump area in Monywa (Photo: AFP)

Fist-sized nuggets of copper cooled in the centre of the village, which otherwise resembled a moonscape. Greenish copper powder coloured the grey, cracked soil. Plastic garbage piled up next to the road near a row of parked motorbikes. A television blared in one of its dozens of bamboo huts.

A 29-year-old farmer, Thida Win and her three children, have used the free clinic sponsored by the Chinese miners.

The mine has given villagers steady jobs as drivers, miners and guards to about 30 local residents, she said. The workers’ daily salary of 3,000 kyat (HK$23.3) is higher, and more regular, than her husband’s wages, she said.

He drives lorries delivering betel nuts to a nearby market. She said she’d like to see him get a job at the mine.

Thida Win standing in front of drying copper in her village Done Tall

Those like Thida Win left behind in the settlement of 300 households have dedicated themselves to reprocessing – by hand – the mine’s residue soil in search of copper.

The mineral now accounts for nearly half the village’s income. In a 20-day process, Thida Win and fellow villagers extract it out of the mine’s leftover soil.

That modernity had no appeal to farmer Tin Zaw.

After he was shot, he refused treatment by the medical team sponsored by the Chinese miners. He sought treatment at the public hospital, and returned to farm his seven acres of land. He said he would get 12.6 million kyat (HK$97,700) for his land under the deal negotiated by the parliamentary commission. This equals seven years of income for the father of two.

Holding on to the land, "is a guarantee for me that I don’t have to worry," he said. "If I take the compensation, the money will be gone after a while, but I can farm until I die."

Military secrets

How Myanmese journalists risk jail for reporting on alleged Chinese chemical weapons

Play video | 3:25

Lu Mu Naing had been a reporter for only two weeks when he was arrested in central Myanmar for one of his first stories. The Unity Journal newspaper had assigned the 28-year-old to follow up on rumours of a military plant producing illicit weaponry.

Through interviews of employees of the plant, Lu Mu Naing wrote a series of articles that alleged that the military facility produced chemical weapons with Chinese help. He was arrested in February and is now standing trial on charges of leaking state secrets.

His short stint as a reporter could cost the former elementary school teacher up to 14 years in prison. He is one of four journalists from the Unity Journal who along with their CEO went on trial in rural Pakkoku in March on the sensitive charges.

The case came, paradoxically, as the Southeast Asian country’s military-backed government enacted its first media law, designed to ensure freedom of the press, after nearly five decades of censorship and harsh restrictions under military rule.

“The conviction and sentencing to prison of the reporters would be the nail in the coffin of Myanmar’s supposed media reform drive”

“The detention and trial of the Unity journalists is the clearest indication yet that military authorities are chafing under the more open reporting environment,” said Shawn Crispin, Southeast Asia representative for the Committee to Protect Journalists. “The conviction and sentencing to prison of the reporters would be the nail in the coffin of Myanmar’s supposed media reform drive.”

In the two reports, the newspaper alleged a secret facility built in 2009 in tunnels near Pakkoku stretching over 3,000 hectares of land was used to make chemical weapons. The reports claimed Chinese workers were seen at the site.

Then Chinese President Jiang Zemin (left) waves as he walks with Senior General Than Shwe upon in his arrival in Yangon on December 12, 2001. Photo: AP

Soldiers from the All Burma Students Democratic Front - Northern Burma, a guerrilla army, near the Chinese border. Photo: AFP

Armed Forces Day parade in Naypyidaw, March 27, 2013. Photo: AP

China's Defence Minister Chang Wanquan (right) shakes hands with Myanmar's Commander-in-Chief Senior General Min Aung Hlaing in Naypyidaw, May 19, 2014. Photo: Xinhua

From top left: Then Chinese President Jiang Zemin (left) waves as he walks with Senior General Than Shwe upon in his arrival in Yangon on December 12, 2001. Photo: AP; Armed Forces Day parade in Naypyidaw, March 27, 2013. Photo: AP; Soldiers from the All Burma Students Democratic Front - Northern Burma, a guerrilla army, near the Chinese border. Photo: AFP; China's Defence Minister Chang Wanquan (right) shakes hands with Myanmar's Commander-in-Chief Senior General Min Aung Hlaing in Naypyidaw, May 19, 2014. Photo: Xinhua

The Myanmar government has consistently denied having a chemical-weapons programme and said the reports were untrue.

Ethnic armed groups have alleged in the past that they were targeted with “toxic gas” by Myanmar’s armed forces. The country has signed but not ratified the Chemical Weapons Convention, an international treaty which would bar it from developing such weapons.

Lei Zhen of the Chinese embassy in Yangon said he had no information on the matter. China is understood to be the country’s largest supplier of military equipment.

The Unity Journal reporters are the first journalists to stand trial on charges of violating the Official Secrets Act since 2012, when the government stopped requiring all newspaper articles to be approved by censors before publication.

Last year, the government allowed newspapers to publish daily editions and Unity Journal was one of dozens of newspapers competing for readers on Yangon newsstands. The newspaper has a weekly circulation of 15,000 copies, according to a former staffer.

In March, Myanmar’s parliament passed two new laws regulating the media, raising concerns over attempts of the quasi-civilian government to curtail the booming press in the country of about 60 million people.

Under the new law, the government can ban publications that could jeopardise national security, incite unrest or undermine ethnic unity. In this case, military officials have filed a criminal complaint on the state secrets allegations with prosecutors in Yangon, Myanmar’s largest city and the home of the Unity Journal. A court there has moved the trial to Pakkoku in what has been interpreted as a measure to prevent demonstrations in support of the journalists.

In an interview with Democratic Voice of Burma, an independent media organisation based in Thailand, Ye Htut, an adviser to President Thein Sein and former senior officer of the armed forces, has said the case was Myanmar’s equivalent of the leaks by Edward Snowden.

Myanmar's presidential spokesman Ye Htut at a press conference. Photo: Xinhua

Opposition leader Aung San Suu Kyi seen in Rome, Italy. Photo: Reuters

Myanmar's presidential spokesman Ye Htut at a press conference. Photo: Xinhua; Opposition leader Aung San Suu Kyi seen in Rome, Italy. Photo: Reuters

“I think even the US government would respond with the same action, concerning national security,” he said. “We will guarantee they get a fair trial.”

Aung San Suu Kyi, leader of the main opposition party National League for Democracy, has also refrained from defending the journalists. The daughter of the nation’s founding father, General Aung San, told an audience of journalists and media executives in Yangon in March that they should “make sure what you write is not only truthful, but of benefit to our people, to our country”.

Speaking in general terms, she said there were too many unsubstantiated reports in the country’s press. “There is a lot of gossip writing and there is a lot of writing that hurts people and doesn’t do anybody good at all,” she said.

“We have a group of young journalists today, very enthusiastic, very committed, but actually without sufficient training,” said the Nobel Peace Prize laureate who spent a total of 15 years under house arrest.

Lawyer Robert Sann Aung, Lu Mu Naing’s lawyer, says the burden of proof now doesn’t lie with the reporters, but with the military. “If the media are free, they will be responsible,” he said.

“As long as [journalists] are not free, they have no duty to be responsible”

“As long as [journalists] are not free, they have no duty to be responsible."

The trial is about the military wanting to send a signal to the media that critical reports are still not tolerated as the country is undergoing political change, he says.

Himself a six-time political prisoner, Sann Aung said he was worried defending the journalist could himself get in trouble. “The government side watches me very closely,” he said, speaking to the Post in his office on the outskirts of Yangon before the 59-year old boarded the 10-hour bus to the Pakkoku. “If I make one mistake, they will arrest me.”