Conflict between Myanmar's armed forces and armed ethnic organizations that broke out on Saturday close to the China-Myanmar border, poses major challenges to China's border security and may threaten the implementation of Lancang-Mekong Cooperation (LMC) projects, Chinese observers said on Sunday.

According to a statement released by the Chinese Embassy in Myanmar on Saturday, the conflict caused some casualties and some local residents living near the border area to flee into Chinese territory and some stray bullets landed in the Chinese territory.

Nineteen people including a police captain were killed and 29 were wounded when the Ta'ang National Liberation Army attacked government security posts outside Muse, Shan State, near the border with China early on Saturday morning, Irrawaddy magazine reported.

Wang Fanhua, who lives in China some 30 kilometers from Muse, told the Global Times that her town, Wanding, remains calm. Wang said it appears the local authorities have dialed up the alert level, with Chinese armored vehicles patrolling the streets.

Another Chinese resident of Jiegao of Southwest China's Yunnan Province across the border from Muse, told the Global Times that "fierce gunfire could be heard in Jiegao, and Myanmar inhabitants in the border area fled into China fearing the situation could worsen."

The Chinese embassy condemned the violence, saying it is deeply saddened by the injuries and death of innocent people.

"Such conflicts are burdensome for China, as it seriously affects China's border stability, with direct challenges for China including the hazard of stray bullets and the settlement of an increasing number of Myanmar refugees," said Zhuang Guotu, head of Xiamen University's Southeast Asian Studies Center.

Zhuang said that such an incident at China-Myanmar border area, which serves as a transport hub for projects under the LMC framework, will also affect the country's sub-regional development.

At present, relevant parties in Myanmar are actively preparing for the third "Union Peace Conference - 21st Century Panglong" and the Chinese side has been providing assistance in this regard based on the needs of the Myanmar side, according to the Embassy.

Zhuang suggested that a conflict right before the peace conference would likely persuade the Myanmar State Counselor Aung San Suu Kyi and her administration to toughen up their previous "mild image" in handling relevant issues.