Burma’s Jade Trail

2007: I think Hpakan will remain the same for the next 500 + years.

(via Gemological Digest, Vol.2, No.4, 1989) Bertil Lintner writes:

Abstract
There are few areas in the world which offer as much fascination to the gemologist as Upper Burma. Throughout history this region has been off limits to outsiders. This situation was merely perpetuated with the coming-to-power of the xenophobic Ne Win regime in 1962. Since that time eyewitness accounts have been few and far between. This is indeed unfortunate, for Upper Burma contains two of the planet’s premier gem deposits: ruby/sapphire mines at Mogok and the world’s only jadeite deposits of consequence near Mogaung.

The following article is based on the author’s lengthy journey through Burma’s Kachin State. He gives a fascinating account of the jade trade, describing the often romantic political and legal complexities surrounding the marketing and distribution of the gem known to Chinese as “the stone of heaven.”

There may not be many places in Southeast Asia where people are prepared to pay US$100 for a bottle of Hennessy cognac or French champagne, $10 for a pint of beer, $3 for a bowl of noodle soup, and over $130 for a pair of running shoes from South Korea. But exorbitant prices seem to matter little at Hpakan in northern Burma, where some people are said to have become overnight millionaires by accidentally unearthing a big green boulder while digging latrines outside their houses.

Described as a mini “Hong Kong” by many visitors, Hpakan, the “jade capital” of Burma’s Kachin State, is reputed to have a much wider and even more exclusive variety of contraband goods than the famous night market in Mandalay. Perfumes from Paris, American cigarettes, tinned New Zealand butter, Australian cheddar and German pressure cookers—anything and everything is available at freewheeling Hpakan.

Thousands of fortune seekers flock to the jade mines every year, ranging from affluent Chinese laopans, or bosses, from Mandalay, Rangoon, Bangkok and Hong Kong, to teenagers and people in their early twenties, all with dreams of striking it rich.

“It’s a very special atmosphere there. The gambling fever affects everyone and people live in perpetual presence,” said one young Kachin student who had spent his summer holiday searching for jade at Hpakan:

“Anything goes. Young boys and girls meet and build huts in the forest, where they stay and dig together. Even married people seem to forget their marital ties as soon as they have crossed the Uru Hka river.”

The jade diggers usually fall into two categories. They are either seasonal migrants—farmers, workers, students, and government employees—or full-time professionals.

Officially, the Burmese government allows jade mining only at three places: Hpakan itself, and at the neighboring villages of Waje Maw and Sanchyoi. There, the work is carried out by government-employed diggers who receive a monthly salary plus a 10-20% commission on any high quality jade they manage to find. That jade is later sold to international buyers at the annual government-organized extravaganza at the Inya Lake Hotel in Rangoon.

But, given the vast amounts of money in circulation, it is hardly surprising that the laopans, and even private diggers, can bribe the local officials who are more than eager to get their share of Hpakan’s fortunes. It is even said that big Hong Kong-based jade companies have their own, secret representatives at Hpakan to supervise the work, organize the buying, and hire agents for transporting the boulders out from the mining areas.

Local people with experience in jade mining told this correspondent that Burmese Army officers go looking for ‘illegal diggers—and even shoot them if they cannot pay the demanded fees:

“If the people killed have only a small amount, the officers keep it for themselves. But if they have a lot of jade, it’s difficult to hide and so the army people have to hand it over to the government. That jade also ends up at the Inya Lake Hotel,” charged one source from Hpakan.

Corruption in Burma—a country which virtually lives off smuggling and black market trade—is by no means confined to Hpakan, but the situation there is aggravated by the immense wealth of the place, and the fact that some major jade syndicates are reputed to be connected with drug smuggling rings. Several big traders are said to bring jade out of Hpakan—and local hard currencies, such as opium and heroin, in to finance the purchase of jade at the mines.

Like most other towns in Kachin State, Hpakan is supplied by convoys of lorries (F.E.E.R, 28 May 1987) which move with tight security because of fear of ambushes which are frequently launched by the rebel Kachin Independence Army (KIA). These convoys carry daily necessities, arms and ammunition for the Burmese Army, and, for a fee, various kinds of contraband, according to Hpakan souces.

The rampant graft and corruption at Hpakan could be the reason why army units are deployed there on a rotational basis. One battalion of government troops never stays more than six months in the area—enough time for an officer to make a fortune, but not too long to let rivalry erupt between him and his colleagues, who are waiting for their turn of duty at the jade mines.

However, disputes between army officers reportedly do occur every now and then. The most serious clash in recent years erupted between some officers from the Myitkyina-based 29th battalion, which was stationed at Hpakan for six months during 1985, and the then commander of the northern command of the Burmese Army, Brig Gen Lazum Kam Hpang. The latter, a Kachin himself, had severely reprimanded the officers from the 29th battalion for alleged maltreatment of Kachin civilians in the jade mines area, even threatening to punish them. It all ended in a shoot out at a coffee shop in Myitkyina on November 16, 1985; Brig Gen Lazum Kam Hpang was fatally wounded and died in the hospital shortly afterwards.

At first, the local authorities put the blame on the Kachin rebels in the KIA, but when no substantial evidence could be presented to support that allegation, the whole story was quickly hushed up, and it went unreported in the government controlled Burmese media. Army deployment in the jade mining region is heavy, but nevertheless confined to Hpakan town, and the government controlled jade mines of Waje Maw and Sanchyoi. In addition, a company size contingent is always based at the Lung Hkang junction, where the road to Hpakan branches off to Kamaing in the Hukawng Valley. The surrounding hills and the countryside—where most jade mines are located—including the famous mines at Tawmaw north of Hpakan, have long been controlled by the KIA.

The Kachin rebels first occupied parts of the jade mine area in 1963, and tax on the trade as well as yearly licenses, or so-called digging tickets have since been a main source of income for the KIA. The rebel army maintains a number of checkpoints around the mines—including one on the main Lung Hkang Kamaing motor road—where a 10-30% tax is levied on the jade which merchants bring out from the area.

A Kachin rebel taxation office told this correspondent that yearly takings, including tickets at the KIA toll gates around Hpakan amount to Kyats 8-10 million—but he added that only 25% of the jade may pass through the rebel checkpoints:

“The most precious pieces are smuggled out, and the total value of the jade extracted from the Hpakan area could be as much as Kyats 100 million a year,” the officer said.

The real profit, however, is made when the jade reaches the Thai border, usually the first destination outside Burma on the long smuggling route from Burma’s Kachin State to Hong Kong, the world’s main marketing center for jade. Prices at the Thai border are said to be five to ten times as high as in Hpakan, and sometimes even more if the jade is of unusually good quality. But before the jade comes that far it has to pass through many stages, involving more bribes to government officials, and additional tax to other rebel groups along the way through Burma to Thailand.

The clandestine representatives of the international jade syndicate at Hpakan—who are not in a position to evade bribes, but who seldom pay tax to the KIA—are reported to bring most of their cut and uncut jade boulders down the Uru Hka river, in a westerly direction towards Homalin on the Chindwin river. In this way, they bypass the KIA’s checkpoints on the Kamaing road and south of Hpakan.

Usually, blocks of jade are tied to rafts or small country boats for the downriver journey to Homalin. There is only one Burmese Army outpost along this route—at Nawngpu-awng—and bribes ease the way here as well as in Hpakan. From Homalin, the jade continues by steamer down the Chindwin, or hidden in paddy baskets and under heaps of straw on bullock carts, until it reaches the railhead of Monywa. From there, rail and lorries take over for the onward trip to Mandalay, Taunggyi, and even as far south as Rangoon and Moulmein, depending on the final destination of the cargo.

Along the way to Monywa, a small percentage of the jade is diverted to India via the Tamu-Moreh border market in the Manipur State. This border crossing point is a main center for the contraband trade between Burma and India, but the demand for jade is not high among the Indians; the customers on that side are the 40000 or so ethnic Chinese who live in Calcutta, and a few other places in eastern and northeastern India.

An elaborate network of local agents, who usually have connections among themselves even if they work for different syndicates, are said to be responsible for the various stages along the routes. One group may take care of the Hpakan-Mandalay section, another would be in charge of the stretch from Mandalay to Taunggyi, Rangoon or Moulmein, and a third party would ensure that the goods are delivered across the border in Thailand, or sometimes by boat from Moulmein to Penang in Malaysia, or even on to Singapore.

During the last leg of the journey, before reaching the Thai border, some traders have to pay transit fees to the various insurgent groups there—the Karen rebel army if the goods are going south to Bangkok, the Karenni army if the destination is Mae Hong Son and Chiang Mai via Loikaw in Kayah State.

But these minor routes would be used by smaller traders only; most of the border between Thailand and Burma’s Shan State is controlled either by remnants of the Nationalist Chinese Koumintang, or by Chang Shee-fu (alias Khun Sa) and his powerful private army. Both groups are dominated by ethnic Chinese businessmen who run their own jade syndicates—and mercenary armies across the border with Burma.

The jade trade, which has brought a fair amount of the present wealth and well being to Chiang Mai, is seen by some observers as potentially even more lucrative than the closely connected drug trade, which sometimes is carried out by the same syndicates. That is becoming more important now when international police agencies in Thailand are stepping up their drives against narcotics smugglers. Unlike heroin, jade becomes a legal commodity once it has crossed the international frontier.

Running the gauntlet into Thailand is becoming tougher, and while most heroin refineries still appear to be located near the Thai-Burmese border, increased police supervision in Thailand is seen by many observers as the reason why more and more drugs now make a U-turn near the frontier, back into Burma and along new ones through that country.

New smuggling routes exist along which both jade and heroin pass through central Burma—where international police control is none existent—down to the Tenasserim coast. Well informed sources assert that it is not difficult to bring any kind of goods through Burma—if one can afford to pay the price.

Small traders reportedly deposit their goods with the policemen who check the passenger baggage on the Myitkyina-Mandalay and Mandalay-Rangoon trains; it is also possible to leave the contraband with the train driver, these sources say.

The fee here would not be more than a few thousand Kyats, or less than 10% of value of the goods, which can be heroin, raw opium or jade. Bigger traders, though, need more sophisticated solutions to the problem. By bribing government officials, they can obtain letters of introduction stating that they are intelligence agents on duty, and that their luggage, therefore, should not be checked. People issuing these letters range from local army officers to government ministers, the sources say, and the fee depends on the authority of the official in question and the solvency of the individual trader. Other certificates can be more cryptic, stating that the bearer should not be recruited as a porter to carry arms and ammunition for government troops—a common practice whenever the Burmese Army launches operations against country’s many insurgent groups—which indirectly means that he is an important person. Bearers of such certificates have assured this correspondent that their vehicles are never searched by the police or the army.

But now it seems that recent events along the Sino-Kachin border may change all this and drastically alter the entire network of underground trade through Burma down to Thailand, and to Malaysia and Singapore. As a result of the rapid modernization drive launched by Deng Xiaoping in China, baggy trousers and old Mao jackets are losing their former popularity—and jade is back again. According to one source along the Sino-Kachin border:

“Previously, the only decoration Chinese women could wear were red Mao badges. Now, also the Chinese in mainland China want to set off the beauty of their women as the overseas Chinese do. Jade is undergoing a renaissance in the People’s Republic.”

Buyers from Peking and Shanghai recently have come down to the border between China and Burma’s Kachin State, and they are reported to be gradually improving their knowledge, almost matching the Chinese jade merchants of pre-revolutionary days. Most of this jade seems to be earmarked for the domestic market, while some gemstones, jewelry and carvings are sold in Hong Kong via the many emporia the Chinese government maintains in the still-British territory.

The exact amount of jade now being sent to China is difficult to determine, and as far as the value goes, it may not exceed five percent of the total output at Hpakan. But it is increasing steadily, since it is a much easier route than down to Thailand.

This correspondent saw convoys of jade-laden elephants and mules winding their way up the steep mountain passes along the Sino-Kachin frontier, and there was little doubt that the routes of the former jade caravans to Tengchong in Yunnan Province were open again. The most frequently used routes lead from Hpakan to the KIA-controlled border settlements of Hkala Yang, Pa Jau and Loije. A smaller amount reaches China via Kambaiti Pass to the north, which is controlled by the Burmese Communist Party (BCP). All three aforementioned gates are in Kachin State—but most jade goes from the center at Mandalay via Lashio to Juili north of the Shweli border river in order to avoid the rebel tax gates.

The difficulty in bringing profitable goods other than jade to China could explain why many traders still prefer the much longer and more risky journey down to Thailand. One source also pointed out that the traders do not want to work only; they also want amusement:

“In Thailand, there are massage parlors and nightclubs; in China there is nothing like that yet. It’s more fun to spend your money in Chiang Mai than in Juili or Tengchong.”

But even when taking this into consideration, it is nevertheless not far-fetched to assume that the direct routes to China are destined to become more important, especially when Hong Kong returns to Chinese hands in 1997. Whether that will severely affect the jade trade with Thailand remains to be seen, but, without doubt, that route will inevitably lose much of its present significance. If that should prove to be the case, the drug syndicates which are based along the Thai-Burmese border may also be affected. Without jade as a supplementary, and complementary, commodity, the heroin trade will become less profitable and more difficult to continue effectively, some observers suggest.

“Jade is popular in China now. But neither the Chinese authorities, nor the Kachin rebels who tax the trade, would allow heroin to come along with it. The Chinese welcome green jade, but not the white powder.”

Gemologists distinguish two types of jade: jadeite and nephrite. The origin of the word jade is believed to be the expression piedra de ijada of the Spanish Conquistadores, which means stone of the side or flank. Wearing jade next to one’s kidney or liver was believed to provide healing benefits. Similarly, nephros is the Greek word for kidney, and this led to the term nephrite.

One difference between these two species is that jadeite is a vitreous and shiny stone, while nephrite has a more oily or waxy finish. Nephrite is also called green stone in New Zealand, where the native Maoris carved it for fish hooks, knives, needles and war clubs—and for religious objects, or tikis, which were worn for decoration and spiritual protection.

The Aztecs and Mayans of Central America revered the beauty of both jadeite and nephrite, and vast quantities were taken away by the Conquistadores when they occupied these ancient empires. Fair quality jadeite has been found in Guatemala, but the location of the original Mayan Mines still remains a mystery. Small quantities of jadeite have also been found in the USSR, Japan, and in California in the US.

But, it is the Kachin Hills of northern Burma which for centuries have been the world’s only supplier of top quality jadeite. The discovery that fine green jadeite occurred in the Kachin Hills is said to have been made accidentally by a Yannanese petty trader in the 13th century. The story runs that when about to return home from a trading trip to northern Burma, he picked up a stone to balance the load of his mule. It proved to be jade of excellent quality, and subsequently a large party returned to procure more. These merchants were unsuccessful, however, as no local people were able to tell them where this kind of stone could be found.

Several more missions came from China, but they were equally unsuccessful. The keenness of the Chinese to locate the jade deposits was not difficult to understand; nephrite jade had been known and appreciated in China from early times in history. And to the Chinese, jade was not just another stone—protective qualities were also attributed to it. Many Chinese children, even today, wear a kind of jade padlock around their necks to protect them from diseases. One type of Chinese nephrite is known as mutton fat, having a yellowish white color. Another variety is called chicken bone and it has a slightly lighter hue. Nephrite most commonly occurs in a green color. But even the finest nephrite is no match for the emerald green jadeite which the Yunnanese trader had brought back from the Kachin Hills.

The final discovery of the jade mines came after 1784, when centuries of hostilities between the traditional enemies, Burma and China, were terminated. Adventurous traders from Yunnan once again entered the Kachin Hills in search of the green stones. This time they managed to find them; big, precious boulders along the banks of the Uru Hka river, near the village of Hpakan, northwest of Mogaung. From the end of the 18th century onwards, the jade trade with Yunnan expanded rapidly. The only hindrances were rough roads and a climate in which malaria flourished. A Chinese temple at Amarapura near Mandalay in northern Burma has a long list of the names of more than 6000 traders who perished while searching for jade in the Kachin Hills—and the roll-call includes only the names of well known traders for whom funeral rites were held. The actual total would be many times that number, had all the small traders and adventurers been included.

The original rulers of the jade mine area were the Shan sawbwas of Mogaung—a place—a name which is actually a Burmese corruption of the Shan Mong Kawng. But pressed between the politically more powerful Burmans to the south—and the warlike Kachins, who pushed down from the north, the sawbwas of Mogaung lost their independence soon after the trade with China had been established.

The state was subjugated by the Burmese Kings of Ava in 1796, and the mines came within the domains of a number of Kachin chiefs, or duwas. The most powerful of these was the Kansi duwas, who drew considerable royalties on the jade trade—apart from the revenue collected by the Burmese governor in Mogaung. The Burmese Kings quickly became aware of the importance of the jade trade; already by 1806 a Burmese Collectorate with an armed force was located in Mogaung.

Although there is no jade at Mogaung itself, the town soon became the headquarters of the jade trade in Burma. Few merchants themselves actually went up to the mines. Instead, they hired local people to dig for them, and the jade brought down to Mogaung where it was bought by the Chinese and taxed by the Burmese authorities. From Mogaung, caravans—often protected by Panthay, or Muslim Chinese, mercenaries from Yunnan—wound their way over the high mountain passes east of the Irrawaddy, across the frontier into China. The demand for jadeite was universal throughout China, and the Hpakan mines were the only source of this superior type and quality.

The trade with China has since been interrupted only four times. The first cut-off occurred during the First Opium War between Britain and China in the 1840’s, when Cantonese traders no longer could come to buy the stones at Kunming in Yunnan. When the war was over, the trade commenced again, but it soon came to a new halt when the Panthay Muslims rebelled in 1857. The unrest in Yunnan, which prevailed for many years, prompted some traders to negotiate with the Burmese Kings, and a new route was opened by sea from Canton, up the Irrawaddy to Mandalay.

From then on the trade picked up and, before long, the mountain routes via Yunnan came into use once more. It continued uninterrupted until World War Two and the Japanese invasions of China and Burma in the 1940s. The fourth time the trade was stopped was, naturally, after the communist revolution in China in 1949. This brought the trade with China to a standstill, which at first appeared to be permanent. Hong Kong then emerged as the world’s leader center, with Chiang Mai in northern Thailand as the most important nexus along the long and dangerous route from Hpakan. By then, the mines had been nationalized by the Burmese government following the military takeover in 1962—at least in theory.

The jade-belt roughly stretches from Hweka north of Indawgyi Lake to Singkaling Hkamti on the Chindwin river, with the main mining area suited between Hpakan and Tawmaw near the Uru Kha river. Jade is also found at a few other places in Kachin State, notably at Mandawng and Shangaw east of the Nmai Hka river—but the quality there is said to be inferior to that of Hkapan-Tawmaw area.

A trained eye is said to be able to distinguish one type of jade from another, and even say from which mine the stone has been brought. But not until it has been cut. Through millions of years of exposure to weathering, jade boulders oxidize, developing a gray to brown exterior skin. Such a skin is largely opaque, hiding the color and quality of the material underneath. Thus no one is able to say exactly what the quality of a piece is until this skin is removed by grinding, or the boulder opened by sawing. It may be the highly prized, translucent emerald green known in the trade as imperial jade, sometimes worth thousands of dollars per carat, or it could be of an opaque white color worth practically nothing. Part of the excitement surrounding the jade business is exactly this: buying the unskinned rough is very much of a gamble. Traders can make a big profit if lucky, or lose their shirts if the quality is low.

This gambling connected with the purchase of rough jadeite could be one of several reasons why jade became so popular with the Chinese—and why the communists later frowned upon it after the 1949 revolution. Now, when China is rediscovering many of its former traditions, the traders from Peking and Shanghai appear to have settled for a compromise: jade, minus the gamble.

“They want to cut the stones before they buy them,” said one local jade expert on the Sino-Kachin border.

Hong Kong is usually the final destination of most jadeite which comes out from Burma via Thailand. The British colony entered the international jade market when the Japanese occupied the former trading centers of Peking, Shanghai and Canton during World War Two—and when the communists took over China in 1949. These events forced two waves of jade merchants to flee to Hong Kong, which soon became the world’s main marketplace for cut jade. Today, either they or their descendants are among the most prominent of the 40 members of the Hong Kong Jade & Stone Manufacturer’s Association.

Despite being carried out by people in business suits and neckties, Hong Kong’s jade auctions are still steeped in ancient Chinese ritual. Whereas a Western auctioneer is all noise and movement, his Cantonese counterpart will stand still and wait for customers to come up to him and offer their bids, using the legendary finger sign bidding technique. The prospective buyer will privately touch the fingers of the auctioneer under a piece of cloth, and just whisper if he is indicating hundreds or thousands of Hong Kong dollars. Keeping all the secret bids in his head, the auctioneer will finally clasp the fingers of the bidder who has offered the most suitable price.

A jade deal has been made.