China’s War in Burma: Funding, Weapons, and Strategic Control

The scam centers operating along Burma (Myanmar)’s borders are among the most significant revenue streams sustaining the junta and the ethnic armed organizations aligned with it, alongside mining and Chinese investment through the Belt and Road Initiative. All three have a direct Chinese dimension.

The scam compounds are run predominantly by Chinese criminal syndicates, the mining output flows primarily to China, and BRI investment sustains the junta’s economic position while benefiting connected cronies. Scam centers in areas controlled by armed groups have brought in billions of dollars annually, with both the military and regime-aligned ethnic armed organizations using their cut to purchase weapons.

These revenue streams are shared between the junta and various ethnic armed organizations, including border guard forces, militias that nominally answer to Naypyidaw but maintain their own interests and are not always fully aligned with it.

This gives the junta a reliable source of ongoing funding, which allows it to purchase weapons and ammunition, including Chinese and Russian aircraft. Meanwhile, the resistance struggles to feed its soldiers and the displaced civilian population.

For every move the resistance makes or considers, it must balance the well-being and support of millions of internally displaced people living in resistance-controlled areas. These IDPs depend on the resistance’s civilian administrations for support and protection. The junta, however, has no such constraints and is free to spend on weapons and launch strikes without consideration.

For the past two years, the Burmese junta has only managed to maintain control over roughly 21% of the country’s territory. However, the regime remains firmly in place because of its complete air superiority and greater access to money and weapons. This wartime economic structure, largely underwritten by China, is one of the primary reasons the conflict has not yet ended.

China’s diplomatic and economic footprint has deepened throughout the conflict. China’s special envoy for Asian Affairs Deng Xijun met junta Foreign Minister Than Swe in Naypyitaw on March 13, days before the opening of a parliamentary session on March 16, to discuss border stability, socioeconomic development, and anti-scam cooperation.

The Myanmar Investment Commission announced on March 16 that it will accept Chinese yuan alongside U.S. dollars for foreign investment activities, a move that reflects deepening economic integration. Min Aung Hlaing had pushed for the change, saying in September that many Chinese investors prefer to use yuan and that Burma was already conducting some trade settlements in yuan and kyat.

The Lancang-Mekong Cooperation framework has become a vehicle through which China channels project funding to the junta. Established in 2016 among China, Burma, Laos, Thailand, Cambodia, and Vietnam, the LMC covers areas including agriculture, science, culture, tourism, and disaster prevention.

From 2017 to 2025, Burma received 132 projects under the LMC Special Fund with a cumulative value of over $38.6 million, the highest total among all member states. The Stimson Center noted that engagement routes through the LMC offer the junta a starting point for international engagement, with Burma being a key stakeholder in realizing the framework.

The junta has attempted to leverage the LMC for broader legitimacy, though with limited success, when Burma held the rotating chair in 2022 and sought to host a leaders’ summit, China did not respond to the invitation and the summit was cancelled, with analysts concluding that Beijing recognized a high-level convening would undermine ASEAN centrality.

The decisive shift in China’s position came in November 2024, when Min Aung Hlaing made his first post-coup visit to China and met Premier Li Qiang, who expressed support for the junta’s planned elections. China also pledged $3 billion in aid to prop up Burma’s currency.

The UN Special Rapporteur identified China among a small number of states that have implicitly supported the junta’s claim to be Burma’s government through actions including presenting diplomatic credentials to junta leadership and strengthening economic and military relations.

As China promotes an expanded version of the LMC, it reinforces Burma’s economic dependence on Beijing while sustaining the regime’s position. China remains a major investor despite international sanctions, and the framework has given the junta access to development projects and political cover it could not obtain elsewhere.

The linguistic and cultural penetration of border areas reflects how structurally integrated parts of Burma have become with China. The degree of integration varies by region.

Kokang presents the clearest case. Its population is ethnically Han Chinese. Residents carry Chinese names, and Mandarin is the dominant language of instruction, commerce, and daily life.

In Wa State, an autonomous region within Shan State, Mandarin is one of four official working languages. Commodities are sourced from China, and the renminbi is commonly used in place of the kyat. The UWSA has recently directed that Burmese be taught as the primary language in schools, with Wa literature as a secondary priority. However, residents report that Chinese remains dominant in daily communication and commerce.

An LSE study found that schooling is far from universal in Wa State and that Chinese spreads primarily through military service rather than formal education. Many boys learn it through army units rather than classrooms.

In the Mongla border region, Chinese has become the de facto lingua franca. Educators report that children mainly speak Chinese rather than their native tongues because it improves employment prospects, and that Burmese instruction is being displaced by Chinese-language curriculum delivered by teachers brought in from China.

Across border zones in northern and eastern Shan State more broadly, Mandarin functions as a working language between ethnic groups that share no common tongue, though this is most pronounced in areas directly adjacent to Yunnan.

This integration predates the current war and makes the region’s alignment with Chinese economic networks structurally durable, independent of political outcomes in Naypyidaw.

In northern Shan State, the MNDAA’s capture of Kutkai and sections of the Lashio-Muse trade corridor has aligned control of strategic routes with Beijing’s economic interests. The pattern is consistent: shifts in territorial control along Burma’s northern border have repeatedly produced outcomes that serve Chinese infrastructure and trade priorities, regardless of which armed actor holds the ground.

These gains have delivered severe setbacks to the resistance, which has lost control of most of the paved roads to Thailand and neighboring countries and must resupply through the jungle. Small amounts of supplies are carried in open pickup trucks, on motorcycles, and even by mules or human porters, moving up and down mountainous terrain through the bush while carefully avoiding landmines, firefights, and exposure to airstrikes.

Consequently, most finished goods, medicines, packaged food products, baby formula, and even personal hygiene items like soap and shampoo are both expensive and in short supply. Gasoline, distributed in plastic bottles and cans, costs about four to five times what it does in Thailand, while bullets can cost as much as $3 USD each.

The military imbalance between forces aligned with the junta and those fighting against it reflects the degree to which Chinese material support has determined the conflict’s trajectory. Between the February 2021 coup and May 2023, 41 Chinese suppliers sold the junta approximately $267 million in weaponry, including fighter jets, spare parts, helicopters, and transport aircraft, according to the Stimson Center.

The majority of the junta’s fixed-wing combat aircraft are Chinese-supplied, primarily FTC-2000G jets delivered by state-owned Aviation Industry Corporation of China. A former Burma Air Force sergeant confirmed to Voice of America that many Russian-made Yak-130s are out of service, making the Chinese jets critical to operations. Russia continues to supply rotary-wing aircraft, and in November 2025 Burma simultaneously commissioned Russian helicopters and Chinese warplanes into its air force.

On the drone front, the junta has access to at least 19 UAV models sourced from China, Russia, and Iran, according to ACLED researchers tracking the conflict. Chinese models deployed on the battlefield include the CH4 Rainbow, CH3A, and Yellow Cat. Beginning in early 2024, junta soldiers attended drone training courses in Tianjin, and by mid-2024 Chinese-made drones were being deployed in large numbers for both offensive strikes and reconnaissance, according to the Irrawaddy.

North Korea’s contribution has been limited to training rather than hardware supply, a junta drone unit commander reportedly attended a missile technology course provided by North Korean specialists in Pyin Oo Lwin.

While many resistance soldiers and civilians say they would like to see a United States intervention, what most people in Burma are asking for is that Washington place sufficient pressure on China to halt the flow of money, weapons, jet fuel, and support to the Burma Army and level the battlefield.

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