China - Men who said they had been fighting Myanmar government troops in fierce battles over recent days streamed into China on Sunday, saying their long-autonomous enclave had fallen and its future was in doubt.

The clusters of weary men, some clutching a few belongings, described widespread bloodshed in the Kokang ethnic enclave in northeast Myanmar after government troops moved in, seeking to dislodge local rulers and their militia who have long controlled this mountainous terrain next to China.

Some said the Kokang militia had been decisively defeated, a turn that will present Myanmar and China with tricky choices on how to govern the enclave and deal with the tens of thousands of residents who have fled to neighboring Yunnan province in China.

The Kokang army has collapsed. We're all on the run, said Chen Bo, a refugee who arrived from Myanmar at the Chinese border town of Nansan on Sunday.

Chen said he was a Chinese national who had been fighting for the Kokang forces for money. He pulled up his shirt to show what appeared to be a bullet graze on his deeply tanned back.

People may return to Kokang, but there'll have to be the right conditions, there'll have to be negotiations so we feel safe, said Chen, a rake-thin man in his thirties.

The Myanmar army had too much strength and won, but running Kokang is very difficult.

Many of the fleeing men said they escaped on Saturday after the latest spasm of gunfights in Kokang, joining the many refugees in Nansan and other refugee collection points in Yunnan.

Kokang has long served as a freewheeling buffer zone between China and Myanmar, and drug trafficking and gambling have long underpinned the enclave's economy. Most of its predominantly ethnic Chinese residents can speak Mandarin.

We're soldiers from the Kokang army. But we had to give up. The fighting was too much, said Xiong Zhaole, walking, head bowed, with about six other men along a muddy mountain road near a border crossing.

Xiong said he and his companions had been told by Chinese soldiers who received them at the border to swap their army greens for blue outfits, abandon any plans to fight and find somewhere to stay with relatives or in refugee camps.

The battle erupted after the Myanmar military moved into the area as part of efforts to ensure ethnic groups participate in elections next year, according to reports by Chinese media and Myanmar exile groups.

One of those groups, the U.S. Campaign for Burma, said in a statement that about 700 troops from the Kokang militia had fled to China and surrendered their weapons.

A BRITTLE BALANCE

The overrunning of Kokang by Myanmar government forces will open up questions about the government's relations with other powerful ethnic groups along the mountainous border with China.

China is one of neighbor Myanmar's few diplomatic backers and has deflected pressure from Western governments over the military government's tough steps against protesters and pro-democracy campaigners.
But the many thousands of refugees highlight the brittle balance Beijing has sought between working with the Myanmar government and accommodating the forces who have long run Kokang.

I think ultimately the future of Kokang will have to be solved through negotiations, not war, He Shengda, an expert on Myanmar at the Yunnan Academy of Social Sciences, told Reuters.

He cited the example of a 1989 ceasefire agreement over control of the enclave.

If the fighting continues, this could damage the stability of other, bigger border regions in Myanmar.

Yunnan Communist Party official Meng Sutie told a briefing on Sunday that about 30,000 people had fled from Myanmar into China, and that two Chinese nationals had been killed in the fighting -- one in Myanmar and another on the Chinese side of the border -- according to state television.

China's official Xinhua news agency reported that Myanmar had apologized for Chinese casualties in the fighting. The report also said refugees had begun to return from China to Myanmar on Sunday after fighting died down.

Li Hui, an information officer with the Yunnan provincial government, told Reuters the main border crossing near Nansan had been reopened on Sunday afternoon, but few, if any, appeared ready to move back just yet.

That could leave Beijing with many displaced and angry Myanmar nationals to cope with in this remote hill country. The Chinese government has not officially called them refugees.

We want (ethnic) Chinese people to run us. We're scared of the Myanmar army and now they have the upper hand, said Li Deming, a native of Kokang who had tramped into Nansan, where refugees are crowded into tents and half-completed buildings.

Far from all the refugees sympathized with the local militia. Some described Kokang as a lawless den of drugs and gambling.

Kokang is run by warlords, and warlords and drugs are like twins, so that's how Kokang works, said one refugee in the main refugee camp in Nansan. He could not give his name, because the interview was interrupted by Chinese officials.

(Additional reporting by Royston Chan in Nansan and Li Jiansheng in Beijing; Editing by Jason Subler)

China