Myanmar/Burma civil conflict
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If china balancing all side and directing the situation perfectly, china can reach insurgent groups in northeast India to supply them continuously without international backlash. Reclaiming South tibet will be a cakewalk. It's the best things china could get from this situation aside from Indian ocean passages.
I don't think so, as far as I know, the only place in China where Burmese is spoken is Dehong Prefecture where it is used as one of the languages (not the first language or mother tongue) of the Jingpo ethnic group, essentially like the Kachins of Myanmar. Although Bamar originated in the Yunnan Nanzhao kingdom (they are essentially descendants of soldiers left over from Nanzhao's 9th century southward invasions, absorbing earlier populations) they did not settle anywhere near the mountainous Yunnan border, which is mainly inhabited by other ethnic groups like Kachin, Shan and Wa. Anyway, even if there was a presence of a small ethnic minority in China it is not really that useful; a number of Kinh Vietnamese are also represented in Guangxi but haven't really helped in dealing with Vietnam.
Generally speaking I would stand by my assessment, that the Bamar, with their history of progroms and expulsions, are similar to the Indonesian/Malaysian Muslims in their attitudes towards Chinese and China. These groups' attitudes are essentially Protocols of the Elders of Zion-level paranoia and jealousy. That's why they kept blaming China when the military coup happened a couple of years ago, although China had no more ties to the Tatmadaw than to any of the other factions in Burma. Basically, it's very unwise to have any direct dealings with these peoples, much less directly ruling them!
The Junta has been accusing China of abetting EAOs for a while now, the propaganda is much more direct now.
Chinese embassy sends out safety notices for Lashio, even after the ground fighting is almost over there. There are rumors that the Junta are planning to use cluster munitions there.
I see how china would shape future of shan, but what about kachin state?
If China feels like it, they could always just accept the militia territory, and then integrate the warlords forces once current one dies. Once the territory enters China officially, how China deal with it is simple.
The actual reason could be China not wanting to antagonize Mayanmar. Better to have a friend than an enemy during important step of kicking out Americans out of west Pacific. Once that happens, the shift in geopolitics provide much more room for ambition.