Chinese gangs are reviving scam centers in Myanmar as Beijing eases pressure on the junta

A recent report from the US Institute of Peace highlights the resurgence of scam centers, especially in Myanmar’s Karen State, due to China’s softening attitude towards the country’s military regime.

China’s attitude has changed, said Jason Tower, co-author of the report and country director for Burma at the institute.

“They are now much more focused on the survival of the regime and looking at how they can prevent the (Myanmar) regime from falling,” Tower told VOA Burmese. “As a result, China has shown much less interest in taking strong action to pressure Myanmar’s military to address these issues.”

According to the report, these criminal networks benefit from the complex dynamics between Myanmar’s military and Chinese interests. China’s focus has shifted from cracking down on scams to supporting Myanmar’s military. This change in strategy allowed criminal organizations to flourish, using Myanmar as a base.

After contacting the Chinese Embassy in Washington about the matter, VOA received a statement that did not directly address cyber scam operations. Instead, it highlighted China’s emphasis on peace and stability in Myanmar.

“China and Myanmar are close neighbors with a deep bond of friendship,” embassy spokesman Liu Pengyu wrote. “As a friendly neighbor, China has always paid close attention to the development and evolution of the situation in Myanmar and Northern Myanmar. We hope to see no conflict or chaos in Myanmar and sincerely hope for a speedy return to stability.”

China’s Ministry of Public Security has presented the situation differently, according to a report published on Monday by the Chinese state news agency Xinhua. In a recent statement on the crackdown on cyber scams, the ministry highlighted joint efforts with Myanmar authorities, noting that “a total of 870 suspects, including 313 Chinese and 557 Myanmar nationals, have been arrested in a crackdown on telecom and online scams. fraud in northern Myanmar.”

Myanmar’s state-controlled media, Global New Light of Myanmar, also focused on the crackdown, noting that Myanmar police had worked closely with China in the extradition of 20 Chinese nationals in September.

Shift in China’s priorities

China’s view of the conflict is constantly evolving based on events in Myanmar, said Thomas Kean, a senior consultant at the International Crisis Group, a non-governmental think tank.

“We have seen different phases since 2021, but ultimately China wants stability in Myanmar to pursue its strategic objectives, keep its borders secure and ensure that Chinese nationals and the economy are not affected,” Kean said.

Tower described how China’s priorities have shifted from tackling scams to focusing on preserving its strategic interests in Myanmar.

“The Chinese government began prioritizing the development of the China-Myanmar economic corridor, which includes infrastructure and trade routes, giving China access to the Indian Ocean,” he said.

Tower said some Chinese strategists had suggested that China may have gone too far in its crackdown on the scam syndicates, causing it to lose sight of its broader strategic goals.

As a result, Chinese authorities pushed hard for a ceasefire between Myanmar’s military and ethnic armed groups to stabilize the region.

‘Pig slaughter’ scam

China’s Myanmar scams have become increasingly sophisticated, the US Institute of Peace report said. The United States has become one of the top targets, losing billions of dollars annually to “pig slaughter” scams.

“Pig slaughter” is a form of investment fraud where scammers lure victims on social media and then defraud them of significant amounts of money, often in cryptocurrency.

Many Americans have fallen victim to scams originating in Myanmar, said Erin West, deputy district attorney with California’s REACT Task Force to Combat High-Tech Crime.

“They liquidated retirement accounts and children’s college funds, only to find out it was all fictitious, and they lost everything,” West told VOA. Victims are lured into fraudulent online relationships, believing they are investing in cryptocurrency, she said.

While some criminals are returned to China, Tower says, broader networks remain largely untouched and continue to operate with the protection of local warlords and military elites. He is concerned that these scams will increasingly become a threat to U.S. national security.

“These scams currently cause estimated losses of around $5.5 billion per year for the US, but other estimates put the figure as high as $15 billion,” Tower said.

These actors are often under the protection of Myanmar’s military or other corrupt regional elites, he added, making it difficult for law enforcement to intervene.

“This is a serious crisis,” Tower said. “We are seeing a massive transfer of wealth from the United States to bad actors in Southeast Asia – actors who undermine democracy, are highly corrupt, and are often under the protection of Myanmar’s military or other corrupt elites. This is bad news for the US on many fronts.”