September 24, 2017

Traders wish for negotiations with Chinese for blocked bank accounts

By May Thet Hnin

Traders want the State to enter into negotiations with the Chinese government over 1,000 bank accounts of Myanmar merchants which are frozen by Chinese banks, merchants said. The Chinese government blocked the bank accounts which are used in transactions in the course of taking actions against illegal importers from Myanmar and Viet Nam.
The bank accounts are reported to have deposits of around Ks400billion, prompting cries for action to the State. The Myanmar Rice Federation (MRF) will also request the State to reach a government-to-government (G-to-G) agreement for rice exports with an aim for the long term and to reopen the banned accounts of the merchants, except those that are linked with drug cases and whose accounts have an illegal flow of money, said Dr Soe Tun, the vice chairman of MRF.
Myanmar is exporting rice, maize, watermelon and other agro products to China mostly through Muse border trade gate. China levies a tax of about 180 per cent for rice imports, which prompts illegal trade in the border areas, he continued.
“China as a member of the World Trade Organisation should provide trade preference to developing countries. During the previous government period, China allowed Myanmar to export 100,000 tons of rice under a G-to-G agreement with trade preference. We expect they will grant it again”, he added.
Similar termination of bank accounts occurred in the past, but the most recent case has involved a large amount of money. The merchants engaged in the Muse border trade gate were united in signing a petition which has would be submitted to the State Counsellor’s office, it was learnt.
“Now, all the border trading has come to a stop at Muse. Therefore, we wish bank accounts that involve transactions of rice, beans, corns and sesames shall be opened. At present, we are now in the meeting room discussing the current issue. We are going to submit the peltition to State level. We earnestly request the Myanmar government to look into this problem and make necessary coordination with the authorities concerned from China.” explained U Yin Sein, secretary of Muse Rice Merchants Association.
Sixty per cent of Myanmar rice production is exported to China, as is 99 per cent of corn production and  90 per cent of watermelon exports, it is learnt.
Currently, trading of Muse border has been suspended. Most of the importers to China are SME entrepreneurs.
If China continues to block the bank accounts, those account owners will be faced with difficulties to resume their trade. If rice imports to China are suspended, the rice price will drop in the domestic market.
As a result, farmers will struggle to meet even the cultivation cost, which will affect the country’s economy, experts predicted. Some merchants practice a payment system in which they pay back money to the farmers only after they receive money, said Dr Soe Tun.
China is the main buyer of Myanmar’s rice, which is also shipped to ASEAN countries, Africa and Europe. Over 400,000 tons of rice have been exported so far this fiscal year, which is targeted to export up to 2 million tons a year.

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