What’s new? Since Myanmar’s 2021 coup, non-Shan armed groups have taken control of Shan-majority areas in Shan State, sidelining Shan armies and politicians. China has assumed a role as powerbroker, dampening fighting but entrenching a fragmented order that risks deepening Shan grievances and fuelling inter-ethnic conflict.
Why does it matter? Shan State is Myanmar’s largest and most strategically important state, central to trade with China and illicit economies. Escalation in its web of armed conflicts would be destabilising. It could also sharpen the country’s ethnic divides and undermine regional security, to China’s detriment.
What should be done? The Shan need greater security and better political representation. Non-Shan groups should include Shan people in local government and work to protect Shan civilians in areas they control. China should pair stabilisation efforts with economic support, and donors should encourage healthy politics by boosting local civil society and media.
Already reeling from decades of conflict, Shan State has entered a new and more volatile phase since Myanmar’s 2021 coup. The military’s decline has enabled non-Shan armed groups to seize Shan-majority towns and villages, while Shan armed groups and political parties are mostly marginalised. Beijing has emerged as a key external broker, pressing groups to stop fighting the regime and aiming to reopen trade routes with China. But it has also entrenched a fractured landscape that risks deepening Shan grievances, fuelling exclusionary nationalism and destabilising a state central to Myanmar’s political and economic future. That future will remain clouded until there is a new politics in Naypyitaw, but local and outside actors can help the state find greater stability in the interim. Non-Shan actors should include Shan representatives in local governance and better protect civilians; China should help create licit economic opportunities; other foreign donors should support civil society, including women-led groups, and local media; and Shan leaders should modernise the inclusive political vision that galvanised the Shan in the past.
Shan State matters because of its size, diversity and strategic location – linking China, Thailand and central Myanmar. It is Myanmar’s largest administrative unit, home to over six million people, including a dozen sizeable ethnic groups. It is also the country’s key overland trade conduit with China and a hub for both licit and illicit economies, from agriculture and mining to narcotics, scam centres and gambling. A multitude of armed entities operate in the state, including long-established ethnic armed groups and dozens of militias with overlapping territorial claims and shifting alliances. Instability in Shan State therefore has national and regional ramifications: over the past four years, conflict along the Mandalay-Muse corridor has disrupted half the country’s formal cross-border trade, while population displacement and criminal industries spill instability into Myanmar’s neighbours.
The coup upended the balance of power in Shan State. For decades, the Myanmar military was the most powerful – and abusive – force, not strong enough to impose its will, but able to prevent any non-state armed group from dominating, in part by establishing proxy militias. After 2021, overstretched regime forces could no longer backstop their local allies or contain their adversaries. Ethnic armed groups representing other minorities, particularly the Ta’ang National Liberation Army (TNLA) and the Myanmar National Democratic Alliance Army (MNDAA), made up mostly of Kokang, emerged as potent battlefield forces. Since late 2023, these two groups have inflicted a series of defeats on the military and seized Shan-majority areas, leaving non-Shan armies in control of a swathe of the state’s north, including areas historically held by Shan armed groups.
While the regime has retaken some of the towns on the Mandalay-Muse highway and may regain more, the coup and subsequent opposition successes have irrevocably altered the complex balance of power in Shan State. But a new equilibrium among the armed actors in the state has yet to emerge, and it may crystallise only through more rounds of violent contestation among them.
Always significant given the state’s proximity to China, Beijing’s role has shifted with the evolving conflict. China greenlighted the MNDAA’s offensive in the Kokang enclave close to the border, happy to see it oust a military-aligned Kokang militia that was deeply involved in cyberscam operations targeting Chinese nationals. But when the group and its allies pushed beyond Kokang into Shan-majority towns, severing the Mandalay-Muse trade route and threatening the military regime’s survival, Beijing intervened to stop the fighting. Since mid-2024, China has combined pressure on armed groups along its border with renewed support for the regime, demonstrating its influence over the conflict by brokering opposition withdrawals. This approach has curbed, if not halted, the fighting. But it has also inflamed national resentment of China – for propping up an illegitimate regime – and entrenched a fragmented political order.
Download full pdf
Original post
