China raises stakes in cyberscam crackdown in Myanmar, though loopholes remain

China has intensified a crackdown on online scams operated in border areas of Myanmar

China Myanmar Cyberscams (Chinese Embassy in Myanmar)

China is ramping up a crackdown on online scams operated by criminal syndicates in border areas of military-ruled Myanmar in an effort that has included a shootout, confession videos and national TV broadcasts of arrests of high-profile suspects.

But the drive has been confined to a limited area and appears unlikely to root out the kingpins behind the human trafficking and other illicit activities aimed at cheating people of their savings via phone calls and online overtures, schemes that are thought to generate tens of billions of dollars in revenue a year.

Over the summer, China announced a series of joint operations with neighboring countries that led to thousands of people being returned to China, many of whom had been lured by the promise of high-paying jobs. Experts say many are victims who were forced into conducting the scams. Those campaigns did not include arrests of ring leaders in Myanmar.

“As soon as we discover them, we hand them over,” said Lu Jiantang, the vice-chair of foreign affairs in Wa, whose job is ensuring that people fleeing fighting in neighboring areas do not include scammers.

On Nov. 18, China’s Ministry of Public Security announced that authorities in northern Myanmar had handed over some 31,000 suspects. Among them, police said, 63 were key players of scamming groups, the police said.

“China seems to be very focused and intent on cleaning its border,” said Jason Tower, an expert on Myanmar’s cyberscam industry at the U.S. Congress-backed think tank United States Institute of Peace said.

Among those arrested are a few related to some of the most powerful people in two special administrative zones close to China’s border with military-ruled Myanmar.

The Kokang Self-Administered Zone and the Wa Self-Administered Division both share a border with China and are heavily influenced by their bigger neighbor. The people living in both places share language and culture with China. Those living in Kokang are ethnically Chinese. Wa senior politicians, who have their own Communist Party, have ties to China’s Communist Party dating back decades and run their government along lines similar to Chinese party committees.

In mid-November, the Chinese police announced they had issued warrants for four people, all surnamed Ming, on suspicion of cyberscams, murder and illegal detention. The family is one of the most powerful in Kokang, with members in the government and local police, and are said to have Chinese passports. A few days later, the state broadcaster CCTV showed footage of police taking three of the four suspects across the border in southwestern Yunnan province.

CCTV reported that Ming Xuechang, a family patriarch and one of the alleged leaders of a scam syndicate, committed suicide when local authorities tried to arrest him on Nov. 15. Myanmar's military government issued a statement saying that Ming had shot himself during the arrest.

The renewed effort to stamp out the scam rings followed a violent shootout Oct. 20 in Kokang in a compound belonging to the Ming family, according to local media. The former editor-in-chief of the Chinese state-backed news outlet Global Times, Hu Xijin, appeared to confirm that undercover police were killed in the incident,

“China is determined to eradicate the poisonous cancer of cyber scams in northern Myanmar ... and this ultimately led to the demise of the Ming family, who are said to have killed four of our undercover military police,” Hu wrote in a recent Weibo post.

The Ministry of Public Security did not respond to a faxed request for comment.

The Ming family are not the only powerful Kokang families caught up in the drive.

A few days before the Chinese issued their arrest warrants for the Mings, Wei Qingtao, a member of another powerful Kokang family, was seen in a video circulated on Chinese social media, which is customarily censored, urging his relatives to let people forced into scamming rings go.

“This time the Chinese government has made its resolution, without clearing away the cyberscams, they’ll never withdraw their police,” Wei said.

Two other men appeared in similar videos. One, Liu Zhengqi, was the CEO of Fully Light Group, the biggest conglomerate in the Kokang zone. Another, Bi Huijun, is a son-in-law of Ming Xuechang.

In late October, China issued arrest warrants for two men who held senior government positions in the Wa Division. One was head of the Wa Construction Ministry. The other was a county chief. A few days later, the Wa Communist Party said they had been expelled from the party. It's unclear if they have been detained.

Wa police handed 194 Chinese nationals to Chinese authorities on Nov. 28, according to Wa's state media, Voice of Wa State. It says such handovers are routine.

Kokang has sent some 26,000 people over back to China in recent weeks, said Yin Masan, head of the Administrative office in Kokang. Of those, 16,000 went voluntarily. “Our police and authorities are cracking down.”

The crackdown has become a factor in Myanmar's conflict.

On Oct. 27, three ethnic armed groups launched a new offensive in northern Shan state against the army. Calling themselves the Three Brotherhood Alliance, they include fighters from the Arakan Army, the Myanmar National Democratic Alliance Army, or MNDAA, and the Ta’ang National Liberation Army.

The MNDAA said the offensive has two main objectives, first, to defeat junta-backed forces in charge of Kokang. The second, to vanquish cyberscammers.

The offensive has put pressure on Kokang's government.

“At a minimum, they understood very well which way the wind was blowing in China,” said Richard Horsey, a senior advisor for the International Crisis Group who tracks Myanmar.

Others say that China is showing it won't tolerate the scams anymore, regardless of how powerful are the people behind them.

“They want to send a signal, they want to kill the chicken to scare the monkey, to quote a Chinese proverb," said Huazong, a well-known Chinese documentary filmmaker who has covered Myanmar for over a decade. “No one is allowed to provide shelter for these people.”

Still, it's unclear how comprehensive China's crackdown will be. Bai Suocheng, the main military commander in charge of Kokang, is also said to have been involved in scams, but none of his family are known to have been arrested.

Those on the ground dispute that all the masterminds have been swept up.

“Among these 31,000 people, there’s no heads of cyberscams. Before we even launched the operation, a Myanmar military helicopter lifted these people away,” said Li Kyar Wen, a spokesman for the Myanmar National Democratic Alliance Army, which is one of the outfits leading the fighting. A spokesman for Myanmar's military did not respond to a request for comment.

Though it may have become harder to run the scams, the syndicates still can take advantage of instability and corruption prevailing in the border areas.

“It’s gotten riskier,” said Horsey. However, “there’s a massive financial incentive to keep this going. The rewards are still there."

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AP researcher Wanqing Chen contributed to this report from Beijing.