Myanmar ethnic rebels to hand Lashio back to junta in China-led deal

MNDAA to return key city to military without resistance under Beijing’s mediation.

Members of the police force of the Myanmar National Democratic Alliance Army (MNDAA) ethnic armed group patrol in Lashio, northern Shan State, Myanmar, on April 9, 2025. (c) STR/AFP

By Anna Fadiah and Hayu Andini

In a striking development that could reshape the balance of Myanmar’s civil war, ethnic rebels from the Myanmar National Democratic Alliance Army (MNDAA) are preparing to hand over the city of Lashio to the military, according to a statement from China’s foreign ministry. The agreement, mediated by Beijing, reflects China’s growing influence in its southern neighbor’s internal conflict and underscores the strategic importance of Lashio, a key gateway to the China-Myanmar border.

The move comes nearly nine months after MNDAA forces captured Lashio in August 2024, in what many analysts described as the most significant loss for Myanmar's junta since its 2021 coup. The seizure of Lashio, which houses the military’s northeastern command and lies on a vital trade route to China, dealt a severe blow to the military’s operational control in northern Shan State.

Now, with international pressure mounting and concerns over regional instability, the Myanmar ethnic rebels are preparing to relinquish the city — not through battle, but through negotiation.

China’s strategic mediation and influence

On Tuesday, Chinese foreign ministry spokesman Guo Jiakun confirmed that both parties had invited Beijing to oversee the peace process and the transition of control in Lashio.

“At the joint invitation of both sides, China recently dispatched a ceasefire monitoring team to Lashio, Myanmar, to oversee the ceasefire between the Myanmar military and the MNDAA and to witness the smooth and orderly handover of Lashio’s urban area,” Guo said during a press briefing.

The diplomatic involvement comes amid China’s complex relationships with both the Myanmar junta and several ethnic armed groups operating along its border. While Beijing has remained a crucial ally and arms supplier to Myanmar’s military rulers, it has also cultivated strategic ties with groups like the MNDAA, which operates in the Kokang region and can field up to 8,000 fighters.

For China, stability along the border is paramount. Lashio’s proximity — just 100 kilometers from Chinese territory — made its occupation by rebel forces a potential flashpoint. Analysts believe Beijing’s intervention was prompted as much by economic interests as security concerns.

Lashio’s fall and its regional significance

The MNDAA’s offensive in 2024 was part of a broader alliance known as the “Three Brotherhood Alliance,” which also includes the Arakan Army and the Ta’ang National Liberation Army. Together, they launched a sweeping campaign across northern Shan State, capturing military bases, trade routes, and resource-rich areas.

The capture of Lashio marked a turning point in the conflict, particularly because it disrupted Chinese trade corridors and challenged the junta’s ability to govern key urban centers.

Following Lashio’s fall, China reportedly responded with subtle but firm pressure. According to sources close to the MNDAA, Beijing cut off water, electricity, and internet services to the Kokang region — a clear signal to the rebels that their gains had crossed a red line.

Troop movements signal imminent handover

While the MNDAA has not yet publicly commented on the reported deal, developments on the ground point to preparations for the return of military control. A military source told AFP that officers have already been transferred to Lashio, while others are en route.

In Lashio itself, local residents have reported sightings of junta vehicles entering the city. One eyewitness was turned away from a hotel by MNDAA members who cited an ongoing meeting between the ethnic group and Myanmar military officials.

A representative from a nearby ethnic armed group, aligned with the MNDAA, confirmed the presence of junta convoys, noting increased movement of military vehicles through the town’s streets.

Peace talks and future uncertainty

Despite the military’s expected return to Lashio, the broader outlook for peace remains murky. China has framed the transition as a step toward stabilizing northern Myanmar, but many ethnic groups remain skeptical of the junta’s intentions. Previous ceasefires have been fragile and frequently broken.

China’s interest in brokering peace may also be driven by its Belt and Road Initiative. The region surrounding Lashio is seen as critical to the success of infrastructure projects linking China to the Indian Ocean via Myanmar. Political unrest and armed conflict have long been obstacles to those ambitions.

In December 2024, the MNDAA had already signaled openness to negotiations, with group representatives stating their willingness to engage in “peace talks with the Myanmar army on issues such as Lashio” under Chinese mediation. That statement appears to have laid the groundwork for the current agreement.

Civilian toll and humanitarian concerns

While the potential for reduced fighting around Lashio may bring some relief, humanitarian concerns persist. Thousands of civilians have been displaced by the ongoing clashes across Shan State, with limited access to food, shelter, or medical care.

China’s influence over the peace process has led to fears that local voices — especially those of civilians caught in the crossfire — may be excluded from long-term planning. Lashio’s future, though now seemingly returned to the junta’s grip, remains uncertain for its residents.

Meanwhile, reports suggest that the MNDAA, although relinquishing the city, may retain strongholds elsewhere in the mountainous Kokang region. Their relationship with China, while currently cooperative, is shaped as much by geopolitical calculation as ideology.

A fragile peace on China’s terms

The decision by Myanmar ethnic rebels to hand Lashio back to the junta highlights China’s unique position in the conflict — part mediator, part stakeholder. The return of Lashio, once a symbol of rebel strength, is now being packaged as a diplomatic success for Beijing.

However, this fragile peace — achieved without gunfire but under mounting pressure — is unlikely to resolve the deeper fractures within Myanmar. Ethnic autonomy, civilian rule, and military reform remain central demands of anti-junta forces.

For now, Lashio stands as a cautionary tale of contested victories and geopolitical trade-offs. As the junta re-enters the city it once lost, the people of northern Myanmar brace for what comes next — uncertain whether the guns are truly silent or merely paused.