This paper discusses the ethnic identity and state identity of the border inhabitants in China Southwest frontier by presenting their daily life and life space. Based on the field research in Mengla county of Sipsongpanna in Yunnan province, this paper tries to understand the plight faced by" state presence" in Yunnan border area and its impacts on identities of both the ethnic group and state. Through the analysis of historical and practical reasons of the plight, two conclusions have been made: firstly, the national boundary influences the life space of different ethnic groups, whose space order was formed in history. The manifestation of this influence is that that their daily behavior is illegal under the border control; secondly, the identity field based on consanguine and geopolitical factors does not coincide with the identity field defined by national entity boundary, and the political significance of border line is also difficult to integrate with the border inhabitants’ practice in daily life. Although the border line dedicates on maintaining state identity,it dissevers ethnic identity of the cross-border inhabitants, which makes the presence of illegal cross-border behavior and absence of the state temporally.