Summary: China?s trade in timber products with Myanmar grew substantially from 1997-2002, from 295,474 m3 (round wood equivalent, RWE) in 1997 to 947,765 m3 (RWE) in 2002. Despite increased volume, timber product imports from Myanmar comprised only 2.5% of China?s total timber product imports from 1997-2002. However, the small fraction of total imports masks two important features: i) timber imports from Myanmar are primarily logged in slow-growing natural forests in northern Myanmar; and ii) logging activities that support the China-Myanmar timber trade are increasingly concentrated along the border in northern Myanmar?s Kachin State. This greater concentration of the timber trade has begun to have substantial ecological and socio-economic impacts within China?s borders. The majority of China?s timber product imports from Myanmar are shipped overland through neighboring Yunnan Province ? 88% of all imports from 1997-2002 according to China?s national customs statistics. Of these, more than 75% of timber product inflows passed through the three prefectures in northwest Yunnan that border Kachin State. Most of these logging activities are currently concentrated in three areas — Pianma Township (Nujiang Prefecture), Yingjiang County (Dehong Prefecture), and Diantan Township (Baoshan Municipality). Logging that sustains the timber industry along Yunnan?s border with Kachin State is done by Chinese companies that are operating in Myanmar but are based along the border in China. Logging activities in Kachin State, from actual harvesting to road building, are almost all carried out by Chinese citizens. Although the volume of China?s timber product imports from Myanmar is small by comparison, the scale of logging along the border is considerable, and border townships and counties have become over-reliant on the timber trade as a primary means of fiscal revenue. As the costs of logging in Myanmar rise, this situation is increasingly becoming economically unsustainable, and shifts in the timber industry will have significant implications for the future of Yunnan?s border region. Importantly, a large proportion of logging and timber processing along the border is both managed and manned by migrant workers. Because of companies? and workers? low level of embeddedness in the local economy, border village communities are particularly vulnerable to swings in the timber trade. More broadly, timber trade has done little to promote sustained economic growth along the China-Myanmar border as profits, by and large, have not been redirected into local economies. In addition to socio-economic pressures, the combination of insufficient regulation in China and political instability in northern Myanmar has exacted a high ecological price. The uncertain regulatory and contractual environment has oriented the border logging industry toward short-term harvesting and profits, rather than investments in longer-term timber production. Degradation in Myanmar?s border forests will have an impact on China?s forests, as wildlife, pest and disease management, forest fire prevention and containment, and controlling natural disasters caused by soil erosion all become increasingly difficult. While political reform in northern Myanmar is a precondition for improved regulation and management of Myanmar?s forests, the Chinese government has a series of economic, trade, security and environmental policy options that it could pursue to ensure its own ecological security and enhance the socio-economic benefits of trade. Potential avenues explored in this analysis include: i) promoting longer-term border trade and distributing benefits from the timber trade, ii) improving border control and industry regulation, iii) enhancing environmental security and strengthening environmental cooperation, and iv) exploring flexibility in the logging ban... TABLE OF CONTENTS: LOGGING IN MYANMAR: A BACKGROUND; MYANMAR?S FORESTS; BASIC TRADE; GEOGRAPHY; AN ANALYSIS OF AGGREGATE IMPORT STATISTICS, 1997-2002; THE LOGGING BAN IN YUNNAN; THE TIMBER PRODUCTION CHAIN: INTRODUCTION; THE TIMBER PRODUCTION CHAIN: EXTRACTION; THE TIMBER PRODUCTION CHAIN: PROCESSING; THE TIMBER PRODUCTION CHAIN: DISTRIBUTION AND EXPORT; TIMBER TRADE TRENDS BY PREFECTURE; BORDER AND TRADE ADMINISTRATION: CHINA; FOREST AND TRADE ADMINISTRATION: MYANMAR; DEVELOPMENTS WITH POTENTIAL IMPLICATIONS FOR THE CHINA-MYANMAR TIMBER TRADE; CONCLUSIONS AND RECOMMENDATIONS; REFERENCES.