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Myanmar: Chinese firms allegedly associated with criminal networks partner with local armed groups in developing special economic zones, analysts say

“Chinese Crime Networks Partner with Myanmar Armed Groups”, 20 April 2020

Along the banks of the Moei River that separates southeastern Burma from Thailand, three new cities are emerging on the traditional lands of Burma’s ethnic Karen. Not long ago, the area was wracked by intense combat between the Myanmar army and Karen nationalists. Today, hotels, casinos and condos are sprouting in unauthorized “special economic zones” owned and operated by murky Chinese business networks in partnership with local, mutually hostile armed groups. Of the three deals behind these cities, two were signed between January and March while the world focused single-mindedly on the spreading coronavirus. In total, 157 square kilometers of Burmese territory have fallen under control of Chinese enterprises tied to gambling, money laundering, cryptocurrency, and even criminal networks…

Civilian residents of Karen State have reacted with alarm to this invasion, fearing that it will overwhelm the state’s civilian institutions, entrench criminal activity in its economy, undermine economic and development reform, and disenfranchise the native population…

The Chinese enterprises behind these three projects have several things in common: Their leadership have links to criminal networks or actors involved in illicit activities; they have pre-existing organizations engaged in casinos and crypto currencies; they claim—apparently falsely—to be associated with Beijing’s Belt and Road Initiative and flaunt connections with key Chinese government agencies; their activities in Cambodia led to a crackdown by the Cambodian and Chinese governments…

The Yatai New City Project (Shwekoko) results from an agreement signed in July 2017 by the Karen border guard force (BGF) and the Hong Kong-registered Yatai International Holdings Group (IHG)…

The Saixigang Industrial Zone Project is also designed to house Chinese businesses being forced out of Cambodia by the China–Cambodia law enforcement program. (In Chinese Saixigang translates roughly as “Surpass Sihanoukville”—the stated objective of its proponents.)… Dongmei Group, which was established in partnership with a Malaysian businessperson, is the key investor in the Saixigang Zone.

The Huanya International City Project, located in Karen National Union-controlled territory in the city of Myawaddy, involves Saw Roger Khin, a member of the Karen National Union Executive Committee and head of the KNU Defense Department. Its Chinese investors include the Huanya Company and the Association of Business Federations of Sihanoukville…

None of these projects has received proper approvals from the Myanmar Investment Commission or the National Economic Coordination Commission, nor have they been reviewed by the national legislature, the Union Parliament. Some have already started to host unregulated gambling, including online gambling. While the Union government is planning to legalize gambling in some form, the new law has not been passed and casino licenses have not been issued, contrary to what the Chinese investors are saying publicly in their promotional materials.

In their public narratives, the three companies claim to be operating under the umbrella of China’s Belt and Road Initiative (BRI), risking the reputation of the Chinese government in Myanmar and internationally. Besides casting an aura of criminality over the BRI, these actors are likely to generate considerable costs for Chinese law enforcement…

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