A state of emergency has been declared in the Kokang region of Myanmar, following intense fighting between ethnic-minority rebels and the army.
President Thein Sein has handed power in the area over to the military and imposed a three-month period of martial law.
Fighting was triggered by the return of rebel leader Phone Kya Shin after five years of exile in China.
Tens of thousands of refugees have been forced to flee their homes.
Chinese state media said there had been 30,000 border crossings by Myanmar nationals over the past week.
Violent clashes between the military and rebel fighters known as the Myanmar National Democratic Alliance Army (MNDAA) have intensified since 9 February.
More than 50 government troops have been killed since then, according to officials, and 26 rebels have died.
Two people were shot and wounded on Tuesday when unidentified gunmen opened fire on a convoy of vehicles marked with the emblem of the Myanmar Red Cross Society (MRCS).
It was attempting to transport civilians displaced by fighting in the Kokang capital of Laukkai to the Chinese border.
At the scene: Jonah Fisher, BBC News, Myanmar
The Kokang are ethnically Han Chinese and at least 30,000 of them have moved straight across the border into China.
Those from other ethnic groups have retreated inside Myanmar and every few hours another truckload of tired people arrives here in Lashio seeking food and sanctuary at one of the monasteries.
They bring with them terrifying stories from days of fighting between the Kokang rebels and Burmese soldiers.
Five years ago Phone Kya Shin, a rebel leader and drug lord, was forced into China and a more compliant administration put in place.
He's now determined to regain control - and returned to Kokang late last year with a small but well equipped army.
Kokang is dominated by ethnic Han Chinese, and the MNDAA says it is seeking autonomy for residents in the region.
The group's general secretary, Htun Myat Lin, said the military administration "would only make the lives of the Kokang people difficult".
He said government troops had occupied Laukkai and had been pounding rebel hill posts, according to a report from AFP news agency.
"Our ethnicity must have dignity," Mr Htun said.
Government officials said the state of emergency had been declared "to restore the region to its original situation", while martial law was put in place "to restore peace and tranquillity".
It is the first time President Thein Sein's government has instituted military administration since coming to power in 2011, giving the army executive and judicial powers in the designated region.
The latest fighting is a setback for efforts to contain conflicts involving ethnic rebel movements seeking greater autonomy, largely in Shan and Kachin states.
The president has been pushing for peace deals with these groups. While many have come into the political fold, sporadic outbreaks of violence have continued.