Crouching Tiger, Fearsome Dragon – China Fights Back Against Fraud in South East Asia
The Asian Crime Century briefing 45
(Source: The Irrawaddy, 17 November 2023, Ming Xuechang’s son and granddaughter handed over to Chinese police)
In the Crouching Tiger Villa in Kokang, northern Shan State in Myanmar, cyber-fraud leader Ming Xuechang last week allegedly shot himself whilst being arrested and later died of his injuries. Ming, his son and also granddaughter were arrested by Myanmar military authorities with assistance from local militias and due to be handed over to the Chinese authorities. The Myanmar soldiers reportedly also destroyed the Crouching Dragon Villa and the telecoms fraud park.
The arrests follow the reported killing on 20 October of at least 60 Chinese nationals amongst other workers who were gunned down whilst trying to escape from Crouching Tiger Villa, a major telecom fraud compound in Kokang. There are rumours posted in online forums that some of those killed were Chinese undercover police agents (although this may be influenced by the drama movie ‘No More Bets’). The killing at Crouching Tiger Villa is being called the “1020 incident” (i.e. 10th October) and may be a catalyst for the Chinese authorities to take more proactive action against the organised crime gangs operating from Myanmar. There is a precedent, as in 2011 the massacre of 13 Chinese crew members on two cargo ships by pirates on the Mekong River led to the establishment of joint patrols of police from China, Laos, Myanmar and Thailand leading to a pax sinica on the river.
The treatment of the people kidnapped and trafficked into fraud compounds such as Crouching Tiger Villa resembles animals, illustrated in this picture which is allegedly victims being moved in by lorry.
(Source: Zhiyuan Said, Weixin, 3 November 2023)
In November, the Wenzhou PSB in Zhejiang province issued wanted notices and rewards of up to 500,000 yuan ($68,520) each for information leading to the arrest of the family crime gang led by Ming Xuechang, a former member of the Shan State legislature and also of the Kokang Leadership Committee. One of his sons, Ming Guoping, reportedly led a militia squadron in Kokang. The gang are believed to have been conducting telecom fraud on Chinese citizens from Myanmar and also suspected of murder, injury and illegal detention.
Action against organised criminal gangs operating fraud compounds in South East Asia is improving, led by the Chinese authorities. There are increasing reports of action being taken by Public Security Bureau (PSB) units in China to seek the interdiction of Chinese criminals known to be involved in online fraud, online betting and gambling, as well as related human trafficking (which often involves kidnapping people who have responded to job advertisements).
In October, the Ministry of Public Security (MPS) reported that as part of an ongoing crackdown on telecom fraud originating from northern Myanmar and targeting Chinese citizens, 2,349 suspects were transferred from Myanmar to Chinese custody. The MPS stated that since August a total of 4,666 telecom fraud suspects have been delivered from Myanmar to the Chinese authorities, with a corresponding 24-percent decrease in the number of cyber and wire fraud cases.
(Source: The Irrawaddy, 13 November 2023, Chinese citizens in the Wa region handed over to Chinese police in October)
Also in October, the PSB in Yunnan and Zhejiang provinces offered rewards of up to 500,000 yuan ($68,400) for information on ethnic Chinese Chen Yanban and Xiao Yankuai, both wanted for operating telecom frauds from a base in northern Myanmar. Chen was reportedly the ‘minister of construction’ and Xiao the governor of a county in Wa State in northern Myanmar. Caixin reported that Chen and Xiao possibly had false ‘Hukou’, or household registrations, in Yunnan and Guangdong provinces, illustrating the significant trade in counterfeit Hukou certificates in China that confuses identification of suspects.
From August, the Chinese enforcement authorities led a joint crackdown with law enforcement agencies from Thailand, Myanmar and Laos on illegal gambling as well as fraud conducted by organised crime groups in the lawless border areas. The four countries established joint operations centres in areas where illegal gambling and fraud operations are concentrated.
(Source: CNI Myanmar, 4 October 2023, Chinese gamblers handed over by the Wa Shan Army to Chinese police in September)
The regional pax sinica efforts against transnational organised crime groups by the Chinese authorities are also extending to possible deployment of police officers in other countries. Recently the governor of the Tourism Authority of Thailand reportedly mentioned publicly that “We have been in discussions with the Chinese embassy about a patrol project bringing Chinese police to Thailand and stationing them at major tourist destinations.” The statement has provoked a public outcry in Thailand, based on fears regarding the activities of Chinese police and security officers stationed in other countries. There was a quick reaction from Thai police leaders, with General Torsak Sukvimol, the national police chief, stating that “I disagree with the import of Chinese police to take care of their tourists, it’s a breach of sovereignty. The Thai police have the potential to keep Thai citizens and Chinese tourists safe.”
There has been increasing international concern in the past several years regarding the extent of law enforcement activity by Chinese agencies outside of their home country jurisdiction following reports of “Chinese Overseas Police Service Centers” (Safeguard Defenders, September 2022), “Chinese Assistance Centers” (China Brief, January 5, 2019), joint patrols in Italy with local police, structured training to local police such as in the Solomon Islands, harassment and intimidation of Chinese dissidents, and extra-judicial action to return fugitives from overseas that effectively constitutes extraordinary rendition. In fact the fears of these varied activities should not presume a single related Chinese international law enforcement strategy, but public perception is invariably influenced by seeing an increasing deployment of police from a state where there is no effective rule of law.
The case of Ming Xuechang shows that the offer of money as reward for wanted criminals may be the most effective means of combatting the Chinese organised crime gangs that have moved into Myanmar and other countries in South East Asia. The PSB announced a reward for Ming and his family members on 11th November, and by 16th November Ming was conveniently dead in Kokang. Short of moving its own police or paramilitary officers into neighbouring countries, there is no other way to combat the transnational organised crime gangs other than pay for the support of the fragmented authorities in Myanmar. There is much to do to combat the fraud epidemic in Asia, but China is fighting back.