On September 6, the United Wa State Party, the political arm of one of the most powerful ethnic resistance armies in Myanmar, handed over 1,207 Chinese online scammers for extradition back to China (Eleven Media Group, September 9; Global Times, September 9). This was the latest act in a long-running saga of transnational criminal activity, including human and drug trafficking, cyber and financial scams, illegal gambling, and natural resource and gem smuggling, which has increased dramatically in those parts of Myanmar that border China and Thailand over the past two years (Interpol, June 7). Much of the rise has been due to the ineffective and corrupt rule by the Tatmadaw — the junta that has been attempting to govern the country since it staged a coup in February 2021. The military regime’s lack of consolidated control has enabled large-scale illegal enterprises tied to Chinese criminal organizations to flourish. Often, Chinese citizens are the targeted victims. However, Beijing’s renewed desire to stem the tide of criminality has less to do with the plight of its victimized citizens, and more to do with the country’s wider strategic interests.
Fraudulent activities have been ongoing for several years (Global Times March 5, 2021; WeChat, August 15, 2021), but there has been an uptick since the coup in 2021, according to the United Nations High Commissioner for Human Rights (OHCHR, August 29). At least 120,000 people across Myanmar may now be held forcibly in locations where they are made to carry out online scams, with centers thought to be located in opaque Self-Administered Zones (SAZs) such as Kokang in Shan State and the Wa-administered city of Mong La on the Chinese border (East Asia Forum, June 14).
The Kokang SAZ is headed by Liu Zhengxiang (刘正祥), chair of a multi-billion-dollar conglomerate, the Fully Light Group. In addition to Kokang, Liu operates casinos in other parts of Myanmar which similarly cater to Chinese gamblers and illegal online gambling for Chinese customers. The Kokang area is practically a digital annexation of parts of Shan state by a Chinese entity (Frontier Myanmar, Jul 23, 2020; United States Institute for Peace, March 7, 2022). Liu is the founder of the Kokang Border Guard Force (BGF), an ethnic militia which operates along the Chinese and Thai borders. In exchange for supporting the junta army and combating opponents of the coup, the BGF are allowed to continue their criminal activities free of government intervention (United States Institute for Peace, March 7, 2022). The BGF thus protects Liu’s business empire. Additionally, by collaborating with business interests in Yunnan, the organization facilitates legitimate Chinese investments in Myanmar, while simultaneously engaging in cross-border illicit activities. They play a pivotal role in safeguarding these investments against potential attacks by EAOs currently in conflict with the military junta.
As of September 20, the junta has arrested 24,817 people since the coup, of whom they have killed 4,096. 19,246 remain detained (AAPB, Sept 20). While China’s emissaries urge “stability” and “development,” they simultaneously sanction exploitative, harmful, and illegal practices through state-connected business practices. The junta is reliant on PRC largesse but are not sufficiently in control of their country to give Beijing what it wants — and would prefer not to in any case. This is a problem that is partly of China’s making. It is less clear that it is one that China has the willingness to fix.