The Chinese military has announced a live-fire exercise near the border with Myanmar, as the effects from an ethnic insurgency raging in the South East Asian country spill over into China.

The official Xinhua news agency cited unidentified military sources who said the drill would begin on Tuesday in Yunnan province, but refused to provide any other details.

Myanmar is battling an ethnic insurgency in its northeastern Shan state. The country declared a state of emergency in the Kokang region of Shan state in February.

Tensions between the neighbouring countries began in March when a Myanmar warplane dropped a bomb in a sugar cane field, killing five Chinese people and injuring eight others.

The Chinese government was infuriated and responded by sending fighter jets to patrol the border in a show of strength as Premier Li Keqiang promised to "resolutely" protect citizens.

Last month local authorities in the southwest of China reported that five people - one Chinese national and four people from Myanmar - were injured after two explosive devises hit the area.

Kokang has strong bonds with China. Local people speak a Chinese dialect, and China's yuan is the common currency.

Since the conflict began tens of thousands of people have crossed the border into China to flee the fighting.

China was a key supporter of Myanmar's military junta while it was under Western sanctions, but president Thein Sein has increased ties with other countries including the United States since launching political reforms in 2011.

AFP