The United Nations and overseas Burmese groups say upward of 10,000 refugees and hundreds of ethnic Kokang fighters are in southern China, presenting a logistical headache for the central government in Beijing.
Still unclear, analysts said, is whether this is only a lull in the fighting and how great an effect this human tide will have on relations between China and its ally, Burma, which is also known as Myanmar.
In the past, Beijing has played down political, social and human-rights problems raised by the West, contending that these were internal Burmese issues that didn't affect regional stability or China's national interest. This stance may be harder to maintain now that the problem has washed over into Chinese territory.
"India will remain quiet as long as its national interests aren't affected," said Aung Zaw, the editor of The Irrawaddy, a news magazine published out of Chiang Mai, Thailand. "But this puts China in a difficult situation."
A number of considerations appear to have fueled Burma's decision to launch a campaign against the Kokang militants, analysts said.
"This is a several-prong strategy," said Zarni, a senior fellow at the London School of Economics and Political Science who uses only one name.
The move may be aimed at boosting domestic support in advance of promised elections in 2010, the first in two decades. The elections are being held under a new constitution widely seen as favorable to the nation's military rulers.
Northern Burma is better off financially than many other parts of the impoverished nation because of smuggling, Chinese investment, trade and other factors. So an attack on the Kokang, the weakest of several armed groups in the area, could win points among voters farther south who envy the area's relative prosperity.
The attack on a group that is ethnically and linguistically Chinese also may be a way to send a signal to Beijing that Burma doesn't want to be pushed around.
Although this risks awakening the sleeping giant, Burma also knows that China's Communist Party doesn't want trouble in advance of the nation's politically sensitive 60th anniversary of party rule.
Furthermore, China recently staked $1 billion on an oil pipeline project through Burma, which probably will make it think twice about applying too much pressure on the military junta.
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