The dark underworld of online fraud

The dark underworld of online fraud

This Jan 11, 2019 photo shows a general view of the town of Muse (foreground) and Ruili in China (background), as seen from Myanmar's border town of Muse in Shan state. Ten armed groups run Muse, which is separated by a shallow river from the gleaming towers of its Chinese counterpart. (Photo: AFP)
This Jan 11, 2019 photo shows a general view of the town of Muse (foreground) and Ruili in China (background), as seen from Myanmar's border town of Muse in Shan state. Ten armed groups run Muse, which is separated by a shallow river from the gleaming towers of its Chinese counterpart. (Photo: AFP)

The Chinese film No More Bets, which sheds light on the intricacies of overseas online fraud, has emerged as a blockbuster success, dominating the big screen and box office earnings.

No More Bets depicts people being deceived into working for a scam network based in Southeast Asia. The film grossed US$505 million (17.6 billion baht) during its first five weeks and reached the top of China's box office in August.

This comes as no surprise, given that the online fraud industry has evolved from a shadowy market into a flourishing, increasingly expanding sector of significant scale. The illicit business encompasses a complex underground transnational economy that includes human trafficking, narcotics and organ harvesting.

Initially established in regions like the Philippines and Cambodia, this industry later shifted its operations to Myanmar after other governments launched crackdowns a few years ago.

The illicit trade has found safe ground in Myanmar, where the national government, after launching a coup two years ago, has been preoccupied with local politics and fighting separatists and militant groups.

There, online fraud became a substantial component of the underground economy. As its primary victims are predominantly Chinese citizens and overseas ethnic Chinese, a film of this nature naturally garners significant attention.

The recent surge in online fraud is predominantly orchestrated by Chinese individuals. Initially introduced to mainland China by scammers from Taiwan, this fraudulent practice was later adopted by illicit entities in regions like Fujian, where it became deeply entrenched. A significant number of participants and organisers in both Chinese and international fraud groups are from Fujian, later joined by individuals from other regions, such as northeast China.

The terms "parks" or "zones" in Myanmar refer to clusters of settlements, each containing multiple parks located along border towns. These "park settlements" encompass various areas, including Muse, Tachileik, Kokang, Wa State, and the notably infamous Myawaddy township in southeastern Myanmar, in Kayin State, close to the border with Thailand's Mae Sot district in Tak province.

A promotional poster for 'No More Bets', a film some feel could drive Chinese tourists away from Thailand. No More Bets

Among these settlements, Myawaddy stands out as a focal point where Chinese nationals are often targeted. Myawaddy boasts around 50 or more parks, with the largest companies employing approximately 300-400 workers. The KK Park Zone, heavily promoted by Chinese online celebrities, is just one of the many parks in Myawaddy. Situated in Kayin State under the jurisdiction of the Karen Border Guard Force (BGF), the Myawaddy region operates with a semi-autonomous status. Despite this autonomy, the Karen BGF, primarily focused on financial gains, holds a significant stake in all the parks it controls, showing minimal concern about what happens within the illicit businesses. Moreover, Myawaddy's proximity to the Thai border ensures access to resources such as electricity from Thailand.

It must be said that the majority of Chinese individuals arriving in Myawaddy do so voluntarily and without coercion. Some may be grappling with difficulties or challenges in their lives in China, seeking an escape from their circumstances. Chinese risk-takers are enticed by the prospect of "high income", acknowledging the risks but willing to take a chance. Due to the lengthy journey and closed border crossings, many have to use illegal means to sneak through borders and get immigration clearance. They need to avoid any official entry or exit records. In the event of complications, these individuals operate in obscurity, making them susceptible to exploitation.

Within these parks, physical violence and abuse -- beatings and electric shocks -- are deemed mild forms of punishment. More severe consequences involve the complete disappearance of victims, particularly those who exhibit poor performance, defy orders, or fail to provide compensation. As these individuals enter through unrecorded, illegal means, their presence is virtually unknown to anyone.

Analysing the grey business in Myanmar unveils a complex tapestry of intricate issues that include geopolitics, border trade, ethnic concerns, and transnational criminal activities. No matter what the factors are, these criminal activities bear significant consequences for China's international reputation.

Furthermore, a discernible disconnect exists between China's internal propaganda and the ground realities, reaching a disconcerting level. This dissonance has not escaped the notice of the global community, leading to an increasing disdain for Chinese nationals. Concurrently, Chinese nationals find themselves subject to manipulation in the region, while China's national strength appears markedly powerless in response.

Kung Chan is the founder at ANBOUND, an independent think tank based in Beijing, specialising in public policy research covering geopolitics and international relations, urban and social development, industrial issues, and macro-economy.

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