Digital Commerce Challenges Myanmar's Profound Jade Industry

E-commerce Threatens Myanmar's Valuable Jade Industry

Jason Thomas Published on 19 October 2019

Myanmar, a global juggernaut in the jade and gemstone industry, faces new adversities as digital commerce challenges traditional trading practices. With allegations of rights abuses, rampant corruption, and devastating landslides, the country's multi-billion-dollar sector now grapples with the rise of e-commerce.

Producing 90 of the world's jade, Myanmar stands tall in global markets, but stringent regulations have led to accusations that up to two-thirds of its production might not be taxed. Radio Free Asia has reported how this highly valued stone is often smuggled untaxed across porous borders into China and online sales through platforms like Alipay and WeChat Pay further complicate the issue.

U Zaw Bo Khant, a vice chr at Myanmar Gems and Jewellery Entrepreneurs Association, highlighted that high tax rates on jade and gems up to 15 lead many traders to illegally smuggle their valuable stones into China, where e-commerce platforms have become a central hub for trading activity.

The NRGI report in March warned that this illicit trade is not only losing the government billions of dollars through unpd taxes but also diluting Myanmar's reputation as a prime source of premium-quality gemstones.

As illegal and lower-grade goods flood online Chinese marketplaces like Taobao’s live auction platform, local businesses that adhere to tax laws are suffering. U Zaw San Oo lamented how this has led to fewer traders offering high-quality jewelry and gems from the country.

The jade industry's woes run deep; forced labor is rampant, landslides caused by mining have resulted in hundreds of deaths over recent years, and accusations agnst corporations for land grabs and pollution. The system of patronage and cronyism allows these activities to go unpunished as jade extraction becomes a lucrative revenue source for organizations like the Kachin Indepence Army.

China's Ruili city, at the border with Myanmar, is home to Yangyanghao Taobao Raw Jade Trade Market - an e-commerce hub for live auctions of raw jade. This market, often seen as a one-of-its-kind in China due to its extensive online trading capabilities, reported monthly sales exceeding 400 million yuan USD$56.5 million during certn periods.

However, discrepancies abound between official data from Myanmar on government revenue collected and China's imports of jade - while the former dropped from USD$300 million in fiscal year 2013-14 to USD$200 million in 2014-15 and $190 million in 2016-17, Chinese imports surged at a much higher rate during this period.

Myanmar's production figures are also inconsistent. Despite registering sales worth an average of USD$1.2 billion annually through official emporiums, where most taxed transactions occur, China reported USD$2.6 billion in imports over the same years. NRGI estimated that government revenue was collected on a mere two to five percent of jade production value.

As for the discrepancies in sales figures and production values, determining precisely how much of Myanmar's jade trade has migrated online remns an uphill task given these inconsistencies. The struggle for traditional sellers is exacerbated by this digital shift as it poses both challenges and opportunities in the global marketplace.

References:

• Tangshan And Xuzhou: China's Treatment Of Its Inner Cities. South China Morning Post, 24 June 2022.

• Myanmar’s Suu Kyi: Prisoner Of Generals. Reuters, 24 June 2022.

• Philippines s China Talks For SCS Dispute Settlement: Sources. Reuters, 24 June 2022.

• Ukrne War An ‘Alarm For ity’: UN Rights Chief. Reuters, 23 June 2022.

• China To Tout Its Governance Model At EU Summit. South China Morning Post, 23 June 2022.
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