For years, Chinese criminal organizations have been setting up shop across Southeast Asia, built on the proliferation of Chinese-dominated Special Economic Zones like Boten in Laos, Shwe Kokko in Myanmar, or the casinos in Cambodia’s Sihanoukville.
Despite the fact that fugitives from Chinese law often ran these networks, Beijing saw them as a useful tool for advancing its interests. Local governments were on the take, and for the most part, Chinese authorities turned a blind eye to the problem.
In Europe triads do everything from marshaling patriotic actions from overseas communities, to quelling dissent and disappearing opposition figures, to opening doors for Chinese businesses, according to a recent report by ProPublica.
In Southeast Asia, Beijing similarly uses criminal gangs as instruments of statecraft. The archipelago of SEZs along China’s southwestern flank were, in essence, “splinters” of Chinese sovereignty, where local law enforcement had little to no jurisdiction.
Recently, however, Chinese law enforcement agencies have intensified their cooperation with Southeast Asian counterparts to address the scourge in transnational crime, money laundering, illicit drug production, human trafficking, and cyber scams.
The answer to the question “Why is China moving now?” is becoming increasingly straightforward amid a flurry of international media and think-tank reports on lawlessness and rights abuses in Chinese-controlled economic zones in Southeast Asia.
Beijing is facing reputational and diplomatic costs for turning a blind eye to labor and sex trafficking, cyber scams and other crimes in the zones. International media exposes have laid bare China’s culpability.
Many of these scam centers and human trafficking rings are being run by fugitives from China. First and foremost, they are wanted for crimes committed within China.
Chinese victims
More importantly for Beijing, the scam centers are preying on Chinese in sufficient numbers that authorities feel they have to take action. This is all the more so as the Chinese economy slows, and people are more susceptible to scams or human trafficking, while illicit drug use is climbing.
China's proactive approach also reflects the fact that there are now enough Chinese citizens who are among the 120,000 trafficked people in Myanmar's SEZs and 100,000 in Cambodian scam centers that authorities are being forced to act. Radio Free Asia reported in May about allegations of 1,000 Chinese in a single scam center in Myanmar whose families had to pay $30,000 to secure their release.
The bigger questions are how selective will China be in the targets of cross-border law enforcement cooperation with its southern neighbors and how long will the proactive stance last?
Recent law enforcement cooperation with Southeast Asian counterparts really got started in 2012, with the arrest of drug lord Naw Kham, wanted for the October 2011 death of 13 Chinese sailors. China compelled law enforcement in Laos and Thailand to assist them in the hunt, and made sure that they got the credit.
Cooperation was sporadic afterward, until recently.
In August 2022, Thai authorities arrested She Zhijiang, a Chinese national holding a Cambodian passport, whose Yatai International Holdings has developed Myanmar's Shwe Kokko since 2017. She has been fighting extradition, but is certain to lose.
In June 2023, six Chinese suspects were apprehended and returned to China from Myanmar in a joint operation, according to the South China Morning Post. Since then there's been a steady return of Chinese nationals.
Just last month, news broke that Singapore authorities had arrested 10 individuals in conjunction with a Singapore$1 billion (US$737 billion) money laundering scheme from Cambodian and Philippine casinos.
Authorities seized 94 properties, S$125 million ($91 million) in bank accounts, cash, 50 luxury vehicles, and countless luxury items.
The investigation and asset seizures have since expanded to S$1.8 billion ($1.3 billion) and includes some 24 individuals. The probe has also expanded to include $56 million in real estate the United Kingdom. Though all were born in China, nine of the ten arrested in Singapore were naturalized Cambodian citizens.
While it has gone unsaid, Chinese law enforcement provided key information on the operation to their Singapore counterparts, which fits a pattern of a much more proactive posture of Chinese law enforcement in Southeast Asia.
In late August, Myanmar handed over 24 nationals to Chinese authorities, according to Radio Free Asia reporting.
In September, Chinese law enforcement, working with their client in Myanmar, the United Wa State Army (UWSA), raided 11 scam centers in Shan State accused of swindling victims out of 120 million yuan ($16.4 million). Law enforcement arrested 269 people, including 186 Chinese nationals who were immediately returned to China. Chinese state media described 21 of the returnees as " golden masters" i.e. the ringleaders.
Within days, the number of people returned to China reached 1,207. Footage of Chinese police escorting a column of detained scammers surfaced on social media.
Selective actions
In another but unrelated case, six people responsible for human trafficking were sent back to China from Myanmar.
To date, China’s actions in Myanmar have been focused in northern Shan state – which raises the question why Chinese authorities are moving against some but not others on that conflict-ridden country's complicated ethnic map.
The UWSA has not taken similar measures in their headquarters area of Kokang in Shan State. Likewise, the scam centers in areas controlled by Karen border guard forces that are aligned with the junta, such as Shwe Kokko and KK Park, or in Lashio or Tachileik in Shan State are still operational.
In next-door Laos, the Golden Triangle SEZ continues its expansion into a city now with its own airport. On September 11th, Lao authorities returned 164, including 46 from the Golden Triangle SEZ, but its unclear whether this reflects an overall crackdown on Zhao Wei's criminal empire.
What seems more likely is that China will act selectively. Beijing wants to garner diplomatic praise when it does take action, while bolstering its influence with regional security services.
China aims to “kill the chicken to scare the monkeys,” by sending a clear signal to the syndicates that they will be targeted if they continue to commit crimes in China.
Through selective but well publicized operations, the government will try to allay public concerns and demonstrate that it will not allow Chinese citizens to be victimized by criminal networks operating overseas.
However, some SEZs and the criminal enterprises that run them remain in Beijing’s broad strategic interests. As such, it remains to be seen whether China will continue to put pressure on the governing authorities to shut the zones, illegal casinos and scam centers.
Zachary Abuza is a professor at the National War College in Washington and an adjunct at Georgetown University. The views expressed here are his own and do not reflect the position of the U.S. Department of Defense, the National War College, Georgetown University or Radio Free Asia.