The strategic significance and value of Myanmar to China is undeniably important. However, China is currently facing enormous challenges in the geopolitical and diplomatic landscape of Myanmar and Southeast Asia. While some Chinese experts and commentators believe that the solution lies in pumping in more funds or that problems can be mitigated through other regional forces, the reality is more complicated than that.
A senior researcher at ANBOUND pointed out that the issue lies in the unchecked activities of organized Chinese crimes, which cause Myanmar and other Southeast Asian countries to reconsider their relationship with China.
As indicated in ANBOUND’s information tracking, call center scams have now evolved into a thriving industry with distinct Chinese characteristics. This gray industry in China has grown to a large scale and become increasingly ruthless, encompassing activities ranging from telecom fraud to human trafficking, organ trade, drug trafficking, and illicit online activities. Initially, these activities were concentrated in the Philippines and Cambodia, but they have since relocated to Myanmar and Thailand. The "residential areas" where “employees” of the scamming syndicates live and work are spread across many regions of Myanmar, including Muse, Tachileik, Kokang, Wa State, and Myawaddy, with Myawaddy being the most notorious. This area is located in the semi-autonomous region of Karen State of Myanmar and is under the control of the Karen National Army, which holds shares in all the call center parks. These parks become a monetary source of the Karen National Army, and it does not interfere with their operations.
Moreover, the Myawaddy region is unique in that it is located near the Thai border, with utilities such as electricity sourced from Thailand. This explains why the widely discussed incident when a Chinese actor was deceived into a scam center there, it not only involved Myanmar but also affected Thailand as well. This is also why Thailand has pledged to China to eliminate such crimes by the end of this year and to cut off the electricity supply to Myawaddy. However, according to various media reports, when Thailand cut off the electricity to Myawaddy, the fraud criminals simply turned to electricity from Laos. When Laos announced it would cut off the power, they resorted to purchasing generators to become self-sufficient. Some analysts suggest that the impact of power cuts on border activities may be limited, and the real victims are the innocent local people. On February 8, media reported that around 30 to 40 Myanmar citizens protested at the Thai-Myanmar border, demanding that the Myanmar and Thai governments cooperate to resolve the power outage and suspension of oil supplies. The protesters, who came from Myawaddy, marched to Second Thai-Myanmar Friendship Bridge, holding banners in Burmese, opposing Thailand’s infrastructure supply cuts, especially the effects of oil shortages and skyrocketing fuel prices. This protest can, in fact, also be interpreted as an indirect protest against China by the local people.
Therefore, the key lies within China itself, which needs to make proactive strategic arrangements to address such frauds. Recently, China and Thailand issued a joint statement, emphasizing a zero-tolerance stance on strengthening the fight against cross-border crimes such as human trafficking, telecom fraud, drug smuggling, illegal online gambling, and money laundering, as well as conducting joint law enforcement patrols on the Mekong River. However, China may need to do more beyond this. ANBOUND believes that the widespread telecom fraud issue is closely linked to China's economic slowdown and rising unemployment. A large number of young people in China, driven by the pursuit of profits, have resorted to illegal activities such as fraud to take a share of China's savings, thereby weakening and destabilizing the country’s economic foundation. If China fails to recognize this as a form of criminal spillover, and instead adopts a victimhood narrative supported by populism, the tourism industries and social stability of Southeast Asian countries could be severely threatened. In such a scenario, China is likely to become a target for other Asian countries, and neighboring powers may turn into its adversaries, while Chinese people themselves could become targets of attack, leading to a collective resistance against China’s influence.
As things stand, Southeast Asia, including Myanmar, will experience even greater fragmentation, with multifaceted conflicts becoming more concentrated in the region. These conflicts span various areas, including crime, U.S.-China relations, trade, the South Sea, cross-strait issues, investment, and the economy. Therefore, if China does not develop a new strategy in Myanmar and Southeast Asia, it will risk becoming passive and potentially losing control. At the same time, China will face the challenge of dealing with political disorder in Southeast Asian countries, where their domestic political instability and the rise of various independent political groups may take control of the situation. Given these developments, China's Belt and Road Initiatives (BRI) and various project collaborations in Myanmar are in fact already completely out of control, and it has lost its ability to manage these affairs.
While most of Myanmar's leadership recognizes the importance of China for the country’s development, the country also has anti-China factions, and there have been numerous anti-China incidents, including protests by ordinary citizens targeting Chinese consulates. Additionally, even though China has brought infrastructure development to the region, some locals view Chinese enterprises as contributing to land acquisition, demolition, displacement, and environmental pollution issues. In recent years, Myanmar’s situation has become increasingly chaotic, with complex relationships among various factions, including groups within the military government, whose attitudes toward China have fluctuated. Myanmar’s state-run newspapers have also propagated anti-China rhetoric in recent years. When combined with the persistent issue of telecom fraud, local hostility toward Chinese nationals and expatriates may likely continue to rise. This will inevitably impact the future development of China-Myanmar relations, including trade and the BRI.
Some may also wonder what role the United States plays in the relationship between China and Myanmar, and what impact the return of Donald Trump to office might have. In reality, Trump has not shown a strong interest in Southeast Asia or Myanmar. During his first term, when Rohingya peace activist Mohib Ullah visited the White House seeking U.S. support for Rohingya refugees, Trump did not directly respond to the issue and appeared unaware of what or where "Rohingya" referred to. Now, in the "Trump 2.0" era, the U.S. is increasingly focused on domestic affairs, with foreign policy taking a back seat. However, there are still individuals within the U.S. Congress and State Department who may not share this outlook. Therefore, U.S. concerns regarding the region will likely persist and should not be entirely dismissed.
It is worth noting that, compared to the United States, India’s involvement in Myanmar should raise more concern for China. According to reports, in October 2024, the media of Myanmar's Tatmadaw government claimed to have obtained secret meeting minutes between India and the Wa State, discussing India’s stance on northern Myanmar. The core message was about the situation of the Myanmar National Democratic Alliance Army (MNDAA). If they do not withdraw from Lashio, reopening the border will not be possible. India also demanded that the MNDAA not cooperate with the People’s Defense Force and that the Wa State military should not supply weapons and ammunition to certain civilian armed groups along the Thai-Myanmar border. Analysts believe that if this information is accurate, India seems prepared to cooperate fully with the junta and firmly support it, with the Wa State only able to follow India’s lead in supporting the military government.
In fact, Myanmar has been cooperating with India, frequently arresting call center scam criminals. In late September of the previous year, Myanmar authorities arrested 313 such criminals at Muse and another 20 members of the four influential families’ remaining forces in Lower Myanmar. As a result, India has requested that the Wa State military assist Myanmar’s military operations, which seems to be a natural outcome. A senior researcher at ANBOUND believes that the most alarming scenario for China is India's involvement in Myanmar's affairs. The fact that the U.S. does not see the value of Myanmar does not mean India overlooks it. Narendra Modi, as a strategic thinker, recognizes Myanmar's significance and understands that India’s influence over Myanmar would greatly enhance its leverage over the U.S. and the West. In fact, if India controls Myanmar, the entire Indian Ocean would essentially belong to India.
In any case, it now appears that the strategic window of opportunity for China in Myanmar and Southeast Asia is gradually closing. If China continues to neglect proactive measures to address issues such as call center crimes, it risks facing the loss of influence in the region, with potentially very high costs to bear.
Final analysis conclusion:
The strategic significance and value of Myanmar to China is indisputable. However, the unchecked activities of organized Chinese crime are providing Myanmar and Southeast Asia with reasons to reconsider their relationship with China. If China fails to make proactive arrangements, its influence in the region might diminish.
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Zhijiang Zhao is a Research Fellow for Geopolitical Strategy programme at ANBOUND, an independent think tank.
