Myanmar has accused Chinese mercenaries of fighting with ethnic Chinese rebels against the government in the northern region of Kokang and has sought China's cooperation to prevent "terrorist attacks" launched from its territory.
Fighting broke out last month between Myanmar's army and the Myanmar National Democratic Alliance Army (MNDAA), which groups remnants of the Communist Party of Burma, a powerful Chinese-backed guerrilla force that battled Myanmar's government before splintering in 1989.
Thousands of refugees have entered China's southwestern province of Yunnan, to the government's displeasure.
This followed a series of undesirable events that China has faced in recent months. Police crackdown on protesters against the Letpaduangtuang copper-mine led to a series of protest in front the Chinese Embassy in Yangon since December, which led to the arrests and court trial of some protesters. It also led to suspicion if other Chinese companies, aside from Wanbao Mining, would uphold environmental and social standards when doing business in Myanmar. China has by far been the biggest foreign investor in the country by country.
In a positive development, V-Power, a Chinese high speed generator-set system integrator and distributor in February started supplying power through its latest gas-fired interim power plant.
In a negative development, a 20-member delegation of the National League for Democracy has cancelled a trip to China.
In Beijing, Deputy Foreign Minister Liu Zhenmin told the Myanmar envoy that China had "consistently respected Myanmar's sovereignty and territorial integrity", China's Foreign Ministry said in a statement late on Wednesday.
China "hopes that the relevant parties can exercise restraint and lower the temperature as soon as possible on the present situation in northern Myanmar, and earnestly maintain the stability of the China-Myanmar border region", Liu added.
It was not immediately clear from the Chinese-language statement how the Myanmar envoy's name is translated in English. China's Foreign Ministry said the envoy was a former ambassador to China who was visiting Beijing as a special representative.
"The Myanmar side thanks China for its help in appropriately handling the situation in northern Myanmar and is willing to keep in close touch with China," the statement quoted the envoy as saying.
Chinese Foreign Ministry spokeswoman Hua Chunying told a daily news briefing on Thursday the government was willing to help with peace talks if Myanmar asked, as it has done in the past.
On Wednesday, Kokang rebel spokesman Htut Myat Lin said the group wants China to help negotiate an end to their fight against government troops after weeks of deadly clashes.
"We suggested to the government to hold discussions as we want to end the fighting and solve the conflict by political means. It's betterif China is involved as a negotiator," he said.
The government has not responded to the request for China to become involved, but said on Monday that it would not open talks with the rebels. The Kokang rebels, formally known as the Myanmar National Democratic Alliance Army (MNDAA), say they are backed by an alliance of 16 ethnic armed groups. "We are hoping to solve the problems along with other member groups," Htut Myat Lin said.
The MNDAA is trying to retake the Kokang self-administered zone, which they controlled between 1989 and 2009, before being driven out by the Myanmar military after a peace deal with the government failed.The government has signed ceasefire agreements with a dozen of Myanmar's myriad rebel groups over the past three years in an attempt to end decades of ethnic conflict.
Led by ethnic Chinese commander, the MNDAA struck a truce with the government that lasted until 2009, when government troops took over the Kokang region in a conflict that pushed tens of thousands of refugees into China.
Peng's recent return is seen at the root of the new fighting.
In an interview with a Chinese newspaper last week, Peng denied he had been receiving help from Chinese citizens or mercenaries.