The end of chaos or the beginning of a new one in northern Burma?

The Ming family, one of the five largest telecom fraud syndicates in northern Burma, has been arrested, three members of the family have been arrested, and the head of the family, Ming Xuechang, has committed suicide. Together with other syndicates that have already switched sides, 31,000 suspected fraudsters have been handed over by the Burmese side to the Chinese side so far.

China’s crackdown on Kokang has almost been completed, to the applause of Chinese informants. But while the fraud plague in northeastern Burma may be over for now, there’s a good chance that it will simply move on to another lawless corner of the globe and start up again.

Do you know the real North Burma?

With a population of 58 million and an area of about 676,500 square kilometers, Myanmar is the 40th largest country in the world and the second largest in Southeast Asia. The history of Myanmar is dominated by four ethnic groups: the Mon (မန် mawn), the Khmer (ပျူ), the Burmese (ဗမာ Băma) and the Dai (ဗမာ Tay, also known as the Shan). ). In G. E. Harvey’s History of Burma, it is argued that the Burmese claimed to have come from the Buddha’s tribe in North India, and that they retained many of the cultural customs of India, having entered Burma from Assam, India, around the end of the reign of the Emperor. Historically, Burma had an autonomous dynasty, but it became a British colony in the mid-19th century, and now its GDP is less than US$5,000 per person on average, ranking 130th in the world, making it a very poor country. Over the past 50 years, Burma has been under military rule and social development has lagged behind.

Burma is divided into two units, “Upper Burma” and “Lower Burma”, which has led to obvious differences in ethnic structure, production methods and cultural characteristics. The British colonial rulers further aggravated the divide by adopting different ruling policies for Upper and Lower Burma, and by “using the barbarians to fight against the barbarians,” and Burma became independent in 1948, but the rift in history did not heal on its own. Geographically, northern Burma’s high mountains, rugged terrain, and complex ethnic composition have made it a region where all forces are intertwined; economically, in order to support the armed forces’ survival activities, many of the local armed forces in northern Burma have made their economy based on illegal industries such as drug, jade, and timber smuggling, and the underground economy is thriving.

The chaotic political environment has laid the groundwork for the growth of the black and gray industry in northern Burma, while technological advances have “catalyzed” its transformation. China has long maintained good relations with the Burmese military government, and has also supported the military forces in northern Burma, especially those under the control of the Kokang warlord Pang Ka-sing, known as the “King of Kokang,” the founder of the National Democratic Alliance Army (NDAA) and the former chairman of the first special administrative region of Burma’s Shan State. Under his rule, northern Burma became a center of various illegal activities, and in the 1990s, after years of heavy-handed crackdowns, the drug trafficking that had once been rampant in the north of the country subsided, and some of the Minjab districts began to look for other ways to make money. In 2019, Myanmar’s new Gambling Law, which allows foreigners to legally register and operate casinos in the country, further accelerated the development of online gambling in northern Myanmar. The rapid development of global mobile communication technology has also seen the integration of Internet technology with the dysfunctional economic model of northern Burma, which has led to a gradual change in the economic structure of the region.

Looking at Burma’s neighboring countries, some of China’s P2P platforms and Internet fraud syndicates are gradually spreading to the north of the country and forming a community of interest with local forces. At the same time, against the backdrop of joint enforcement actions between China and Southeast Asian countries, telecommunication network crime syndicates from the Philippines, Cambodia and other countries are shifting to Myanmar. As a result, northern Burma and Myawaddy in Myanmar have become the hardest-hit areas in Southeast Asia and even globally in terms of telecommunication fraud.

China’s stance on Myanmar as a center for piracy has been extremely influential. China has maintained good relations with Peng Jiasheng and his military family, but has a long history of cooperation with the Burmese government. However, Chinese nationals are also the biggest victims of telecoms fraud, so China’s willingness to crack down on telecoms fraud and cooperate with the Burmese government will be key.

In the opinion of many criminals in northern Burma, compared with drug trafficking, online gambling is “less risky and more profitable”. The economic development of Wa and Kokang has begun to rely on the Internet gambling and fraud industry. In Wa State, for example, in Mangnang County of Wa State, there is even a situation where school buildings are rented out to fraudulent companies. It is no wonder that there are hundreds of fraud parks in Myawaddy on the Burma-Thailand border alone. Together with the fraud syndicates that are entrenched in parts of northern Burma, there are at least 1,000 parks in total, with more than 100,000 people practicing telecommunication frauds every day.

The delicate relationship with China

Since the beginning of the year, China has taken a more proactive stance on telecoms fraud. According to the Chinese side, the Ministry of Public Security and the Yunnan Provincial Public Security Bureau have been cooperating with relevant local law enforcement agencies in Myanmar on border police enforcement since September this year, which has resulted in a large number of suspects of wire fraud being caught in the net, and in November the Chinese public security authorities further deepened the cooperation between the two countries on police enforcement and launched an offensive against wire fraud in the north of the country. The cooperation between the two countries has resulted in a variety of combinations that have led to the success of the battle, with 31,000 suspects being handed over to China. But the story goes much further than that. Media sources have reported that China has supported the Burmese military since it seized power in 2021, while the Chinese government has maintained complex cross-border relations with armed factions in northern Burma for years, often outside the control of the military government.

China exerts significant influence in northern Shan State, particularly in areas controlled by the ethnic Kokang, Burma’s ethnic minority. The Chinese government is embarrassed by the large-scale criminal activities, especially telecommunication fraud, that are taking place in the border area and has vowed to stamp them out. For the past month, Myanmar has been staging a dramatic gangster movie to help China fight wire fraud. But it’s clear to everyone that the Three Brothers Alliance, led by the Kokang rebels, is fighting fraud and traitors, but its ultimate goal is to reclaim territory controlled by the Burmese military, and so the counter-fraud campaign has indirectly triggered a civil war in the country.

The Burmese authorities have long suspected Chinese involvement in supporting local armed factions. This year’s telecoms fraud crackdown is believed to be an attempt by China to help the armed forces in northern Burma to dismantle the fraud syndicates, indirectly triggering a civil war in Burma that has cost more than two million Burmese people their lives in displacement. Therefore, this anti-electrofraud campaign is like a slaying between CCP agents due to a conflict of interests, and it has once again trampled on Myanmar’s democracy, which has been difficult to achieve due to internal racial tensions.

Of course, China cannot be blamed for the difficulty of democracy in Burma, because the internal conflicts between the Burmese and the other seven ethnic minorities, even if resolved through a federal system, have made it impossible to reach a consensus on issues such as the official language and script, a common currency, or a single federal army, not to mention the fact that the Shan, Karen, and Kachin ethnic groups have split into different armed forces, and have long been in tension with the Burmese, all of which have been detrimental to the development of democracy. The recent resurgence of civil war has been a major factor against the development of democracy. The recent resurgence of the civil war has further aggravated the democratization process.

It’s hard to go back

As the campaign against telecoms fraud continues, new choices seem to be emerging for the Burmese government. But easier said than done. The fragmented political, economic and social landscape of northern Burma makes it difficult to develop a normal economic model. Over the past few decades, the Kokang economy has been supported first by drugs, then by gambling and wire fraud. Historically, northern Burma and Kokang have always been highly autonomous, and the government has always chosen to rule in cooperation with the local Tujia leaders; Peng Jiasheng, the chairman of the autonomous region that actually ruled Kokang from the late 1980s to 2009, once said that there was no way to do business in the region, with no land for agriculture and no market for industry. This has left Kokang with no choice but to rely on opium cultivation, drug trafficking, casinos, and, in recent years, even fraud parks to make a living.

Differences in aspirations for statehood and conflicts over the allocation of power and resources have led to armed conflict between the Burmese central government and ethnic armed groups, which continues to this day. Now, the four big families represented by Bai Sok Seng, Wei Chao Ren, Liu Guoxi, and Liu Zheng Xiang in the old streets of northern Burma have finally collapsed under the attack of the Kokang Allied Army. They died, were injured, and fled, and the former unrivaled families were suddenly scattered, and the former strong families could never return to their former prosperity.

The aftermath of the fraud sweep is a new round of military conflict between the local armed forces and the military government. A drone attack on a fleet of Chinese trucks has burned about 120 vehicles. China has yet to respond. After all, the civil war in Burma has so far not caused any substantial economic losses to China, so as long as China’s economy is not affected, the safety of the Chinese people is safeguarded, and China’s influence on the balance of power and stability of the Burmese parties in the future remains, this is the bottom line that China can accept.

China’s wait-and-see attitude is not difficult to understand. This is in line with their two-pronged strategy of maintaining a balance between the Burmese military government and the local ethnic armed forces. After all, there are major Chinese investments in Burma, such as the Belt and Road project and the Sino-Burmese oil and gas pipeline that runs through the Kokang and Rakhine regions to Kunming, which is especially crucial for China to avoid the Malacca dilemma. China’s attitude is therefore ambiguous, waiting to see what happens and enjoying the benefits. Inside Burma, even if the four big families are eliminated, the vacuum of power and economic hardship could allow new criminal forces to return to Kokang and resume their old ways with a new umbrella.

Western Perspective

Many Western countries are aware of the support of the Burmese warlords in the telecom fraud ring, but as long as the influence of these activities is confined to the Chinese, they are reluctant to pay much attention to it. But as long as the influence of these activities is limited to the Chinese, they don’t want to pay much attention to them, because after all, this is a matter of internal affairs for the Burmese government, just like drug trafficking in Colombia or Mexico, in which the U.S. can’t intervene directly. The fact that the Chinese government has taken the initiative to assist Myanmar in dealing with telecom fraud may temporarily suppress the global trend of Chinese fraud, but it also affects the internal balance of military power in Myanmar. Whether or not this will destabilize the Burmese government in the near future is a development that we will all be aware of and concerned about. However, since Burma does not have much economic and political influence, it is likely that only the Chinese will keep an eye on the situation.

Text / Editorial Department
Photo / Internet