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Kokang troops, from Burma’s Shan State, who had escaped the Burmese Army’s onslaught in
August last year and  sheltered all this time in China’s southwest Yunnan province,
surreptitiously entered Kachin State over 12 days ago said local sources.

The troops with about 300 fighters of Kokang Chinese ethnic origin, or the Myanmar National
Democratic Alliance Army (MNDAA) entered territories under the control of the the Burmese
Border Guard Force, former New Democratic Army-Kachin (NDA-K), eastern Kachin State,
bordering China’s Yunnan province, said sources close to the rebel group.

Border-based military observers said, the Kokang troops entered three different places in
separate batches in former NDA-K territories--- Pangwa, Kambaiti. Most of the troops entered
N’Mai Hku, or also Hukone.  

The troops are under the command of Peng Daxun, the eldest son of Peng Jia-sheng, leader of
the Kokang, who is in hiding following a warrant by the Burmese junta, after the rebel capital
Laogai was captured by Burmese troops in August, last year, said sources.

After the fall of Kokang territories, Peng Daxun’s troops fled to Chinese border town Nansan in
Yunnan province opposite Kokang territories, where they were granted special shelters without
their weapons being confiscated by the Chinese authorities, added sources close to the troops.

Eyewitnesses said, Peng Daxun’s troops have been entering former NDA-K territories from
Nansan in small groups in four to five cars at a time with military-backpacks but without arms
since June 28. However, the last three covered trucks, which entered former Kachin rebel
areas, were suspected to be carrying weapons.

Kachin residents in former NDA-K areas said, they saw more Chinese stringers in Chipwe dam
project in N’Mai Hka River since early this month.

An officer of the Kachin Independence Organization (KIO), former military ally of Kokang, said
on condition of anonymity, “Under a joint secret plan of the Chinese and the Burmese junta,
Kokang troops were instructed to enter Kachin State to harass the KIO, which has refused to
accept the junta-proposed Border Guard Force”.

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Peng Daxun is a close friend of Burma’s drug lord Lo Hsing Han’s son U Tun Myint Naing,
a.k.a. Steven Law, the owner of Burma-Asia World Company, which is implementing seven
hydropower projects in Irrawaddy River, Mali Hka River and N'Mai Hka River in Kachin State
with Chinese state-owned China Power Investment Corporation (CPI).

With help from U Tun Myint Naing, who has married a Singaporean, Peng Daxun has business
investments in companies in Singapore, said sources close to the two.

A border based Kachin military analyst agreed with the KIO officer and said China and the junta
are using Kokang troops by providing them with business opportunities in Kachin Sate to
pressurize KIO.

This development comes three months after the KIO rejected the junta-proposed Border Guard
Force proposal in absolute terms, and two Kachin parties linked with the KIO are yet to be
approved by the junta-controlled Election Commission for contesting the 2010 election later this
year.

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