Myanmar's cross-border trade with China: beyond informal trade

Koji Kubo

No 625, IDE Discussion Papers from Institute of Developing Economies, Japan External Trade Organization(JETRO)

Abstract: Myanmar's trade with China is heavily concentrated in cross-border trade through the Yunnan province of China. In this qualitative analysis, we examine factors that yield such a concentration from the viewpoint that trade would be concentrated in the channel where transaction costs are relatively low compared with those in other channels. It is almost certain that weak law enforcement at the border gives rise to informal cross-border trade, which allows traders to save the time and costs for compliance with formal procedures. Apart from informality, unique institutional arrangements have been emerging spontaneously in the border area that can reduce transaction costs in a way compatible with formal trade, thus augmenting cross-border trade. Based on observations of thriving trade at Myanmar's border with China, we draw implications for the country's general trade facilitation measures.

Keywords: O17 - Formal and Informal Sectors; ,O53 - Asia including Middle East,International trade,Informal sector,Myanmar,Cross-border trade,Informal trade,Transaction costs of trade (search for similar items in EconPapers)
JEL-codes: F19 (search for similar items in EconPapers)
Date: 2016-12
New Economics Papers: this item is included in nep-cna, nep-int, nep-iue and nep-sea
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Published in IDE Discussion Paper = IDE Discussion Paper, No. 625. 2016-12

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