This week, anti-government forces in Myanmar took control of Laukkai, the capital of Kokang region, which borders China. An offensive led by the Three Brotherhood Alliance, which comprises several ethnic militias, that began last October in the country’s north has been remarkably successful, changing the balance in Myanmar’s ongoing civil war.
China has generally supported Myanmar’s ruling military junta since it took power in a coup in 2021, but it now appears to be playing both sides, avoiding conflict with the rebels while still talking to the government.
One factor in this shift is the Three Brotherhood Alliance’s targeting of telecommunications scam operations in the border region. Laukkai is a hub for such scams—known in China as “pig butchering,” referring to the practice of fattening up targets by building relationships with them and offering investment opportunities, then stealing their money. The alliance wrote in a now-censored message on Chinese social media that it had targeted “telecommunications fraud [and] scam dens.”
Get-rich-quick scams have been around for centuries, but so-called pig butchering has become unusually profitable in recent years for a few reasons. First, cryptocurrencies have allowed easier cross-border transfers and a built-in audience. Second, scammers have honed their experience within China: Online scams proliferated in China in the 2010s, serving as a kind of testing ground for techniques now being deployed on a global scale.
Finally, the military coup in Myanmar in 2021 created the space for the gangs to operate even more freely, in addition to producing violent struggles for control along the border.
The gangs that run the scams from Myanmar have lured Chinese citizens into “cyber slavery,” offering them highly paid jobs and then forcing them to work in guarded compounds. Chinese citizens are preferred over locals because they are more likely to have both Chinese- and English-language skills and the online literacy needed to make the scams work. The Three Brotherhood Alliance offensive has already led to the release of some victims.
Most of these gangs operate along China’s borders throughout Southeast Asia, including in Cambodia, Laos, and Myanmar, all of which have long been centers of criminal activity from drugs to arms smuggling, often with the collusion of the militaries on both sides of the border. China has become increasingly irritated with Myanmar’s failure to rein in the scams.
Chinese officials have attempted crackdowns and issued tough requests during visits to Myanmar to little avail. The military leaders in Naypyidaw either lack control over their own forces or are getting kickbacks so large they don’t want to give them up. If the rebels can offer the kind of control China wants over the trade—and reduce the likelihood of cross-border fire harming Chinese citizens—Beijing will be ready to deal with them.
The current situation involves considerable cynicism: After all, one of the key rebel groups in the Three Brotherhood Alliance is the Myanmar National Democratic Alliance Army, which reportedly has criminal ties itself. The scams may be allowed to continue—but with financial benefit to those in control now and without victimizing Chinese citizens.
One factor complicating things may be the Chinese government’s crackdown on corruption within the People’s Liberation Army (PLA), which has historically been complicit in some cross-border crime, including supplying ammunition to rebel forces in Myanmar and providing protection to casinos in the country frequented by Chinese guests. The cleanup within the PLA could end up affecting a lot of the relationships built up over the border.
It’s unlikely that China will entirely ditch Myanmar’s junta. In the long term, if it looks as if there is a clear winner in the country’s civil war, Beijing might swing its full weight behind it. But for the moment, it is likely to keep talking to both sides to get what it wants: protection for Chinese citizens and Chinese business interests.
What We’re Following
“No mercy” for corruption. In a widely covered meeting at the internal discipline agency of the Chinese Communist Party (CCP)—known as the Central Commission for Discipline Inspection—Chinese President Xi Jinping promised “no mercy” and further crackdowns against corrupt officials. The Monday speech comes in the wake of a record-high number of purges of top officials in 2023 and a renewed focus on military corruption.
Bloomberg reported that U.S. intelligence believes that corruption in the PLA is bad enough that it may restrict China’s military ambitions. (It is worth noting that U.S. intelligence inside China is also quite limited and that stories of corruption sometimes grow in the telling.) Nevertheless, Xi has a big problem. Promising a clean sweep makes sense when you take power, but when you’re still wielding the broom 12 years in, people may wonder just how effective it is. It is also difficult to carry out anti-corruption campaigns while also pushing for greater economic growth.
Ultimately, Crackdowns make businesses more nervous about the CCP’s unrestrained power—and they can end up taking out the unofficial workarounds that make systems full of red tape work at all.
Taiwan’s elections. Taiwan goes to the polls on Saturday, and Lai Ching-te, the candidate for the ruling Democratic Progressive Party (DPP), seems the most likely victor against a split opposition. Lai was leading the polls before Taiwan’s two-week moratorium on polling kicked in, and little seems to have changed since. A funny ad featuring him and Taiwanese President Tsai Ing-wen taking a road trip together went viral; it suggested that Lai would continue Tsai’s legacy, while the opposition would take Taiwanese democracy backward.
A DPP victory will likely result in some provocative military maneuvers from China, which has already been sending balloons over the island. But the DPP will probably not keep control of Taiwan’s parliament, restraining Lai’s power. (Foreign Policy)