China, transnational organised crime, and Southeast Asia’s SEZs — is this Quid pro quo?
China, transnational organised crime, and Southeast Asia’s SEZs — is this Quid pro quo?
WRITTEN BY MARCO NEVEU AND CHARLIE THAME
11 November 2022
In October 2022, a report by Radio Free Asia’s Laos service revealed that as many as 700 Malaysian workers were being held for ransom in the Golden Triangle Special Economic Zone (GTSEZ), an enclave created by the Laotian government and leased to the Chinese-owned and Hong Kong-based Kings Roman Group as a joint venture. Beaten and tortured, the workers have been forced to work as online scammers by their Chinese employers. The report interviewed Laotian workers in the SEZ who had encountered a variety of nationalities from across Southeast Asia, making this an issue that should be of concern to all ASEAN countries. The case highlights an emerging link between Chinese-supported SEZs and transnational organised crime. A Chinese domestic crackdown has shifted the problem to the periphery of China’s sphere of influence, raising questions about the relationship between Beijing’s policies and transnational organised criminal (TOC) groups.
The liminal spaces of SEZs
SEZs occupy a special space within the states that create them. By design, they operate in a legal, economic, and political environment that is distinct from the rest of the country. Activities inside are governed by a permissive legal framework that not only invites investment but, according to the UNODC, also creates an environment susceptible to criminal co-optation with easy access to global supply chains. Loose laws and regulations make them opportune places for criminals to infiltrate trade networks with trafficked goods and persons or set up casinos to launder money on a grand scale. Corruption and informality facilitate sympathetic relations with officials. An article earlier this year revealed the plight of Thai women who had been tricked into sexual servitude in SEZ casino towns in neighbouring countries. Their experiences and those of officials in Thailand and Laos show how authorities have been defanged in their responses to crime in SEZs as they are often disarmed upon entering these enclaves.
Many scholars have attempted to explain the liminal space of SEZs. They have described them as spaces of intersecting and flexible sovereignties, neo-colonial concessions, exploited land and labour, and governance insulated from popular control. All these studies have noted that worker protection takes a back seat to unequal economic development, facilitating the formation of a precarious labour force left with little power over its working conditions. Explanations as to why officials of host states would agree to the establishment of these zones and acquiesce to the exploitation of local workers range from prioritising the need to attract FDI, to complicity through corruption, and/or being unwitting partners duped to serve the needs of an imperialist power. SEZ laws are commonly drafted by foreign partners and devolve statutory powers of state ministries to on-site authorities, undermining national laws and disempowering host state officials.
Xi’s anti-corruption projects in the mainland seem to have sparked a degree of outward mobility by the triads from the authoritarian domestic core towards the more liminal and experimental periphery of Chinese influence.
In the interest of capitalist development, SEZs were first promoted during the Cold War by the Truman administration, by UN organs and Bretton Woods institutions in the 1970s and 1980s, and by the Asian Development Bank in the 1990s and 2000s. In recent years, the Chinese state has become a key SEZ proponent. At times, Chinese state-related organs partner directly with host states, or otherwise facilitate Chinese investment into the establishment of or operations within SEZs, making the Chinese state a looming and powerful third party in many regional SEZs.
Several SEZs in Southeast Asia have developed unique and complex relationships between host states, SEZ developers, investors, and the Chinese Communist Party (CCP). The former attach themselves to the CCP symbolically, while seeking a degree of independence in their operations abroad. Numerous links between SEZ developers and investors and transnational organised crime have come to light across the region. The Sihanoukville SEZ in Cambodia, recently labelled a “hub for human trafficking and scam activities”, received material support from China’s Ministry of Commerce under its Overseas Trade and Cooperation Zone promotion system, aimed at promoting the Chinese development zone or industrial park model. Chinese companies behind other zones in Cambodia and Myanmar have claimed to operate under the umbrella of the Belt and Road Initiative and flaunted connections with Chinese government agencies. SEZ developers have also created opportunities for Chinese state-owned enterprises, such as inside Lao’s GTSEZ, where waterborne transportation infrastructure was built by the state-owned China Communications Construction Company (CCCC).
An uneasy partnership between the CCP and TOC
Transactional relations between transnational crime groups (such as the triads) and Chinese state officials date back at least a century. Beginning as a network of Han nationalist secret societies and trade associations, the triads struggled against the Qing dynasty and gained political power with the ascension of the Kuomintang (KMT) in 1911. Groups such as the Bamboo Union became embedded in the KMT, rising to positions of political power and engaging in politically motivated assassinations up to 1984. After losing the support of the KMT, the Bamboo Union shifted towards the CCP through pro-unification political parties and figures like Chang An-lo, seeking a symbiotic relationship with the authoritarian regime and becoming an element in the CCP’s “Political Warfare” on Taiwan.
Through anti-corruption campaigns, the CCP has cracked down on the triads and similar gangs at home, dampening their influence on the party hierarchy. Several corruption vulnerabilities within the party were addressed as part of Xi Jinping’s effort to consolidate power and enhance the party-state’s capacity to pursue governance objectives. Corruption had allowed spies and gang members to infiltrate the CCP’s power structure, presenting both an intelligence and a criminal concern. However, Xi’s campaigns did not address the core political practices that enabled corruption.
Rather than removing corruption, the CCP has sought to control who has access to these methods of political manipulation. This suggests the CCP is comfortable with corruption as long as it serves party goals, rather than those of foreign states, TOC, or businessmen. The “protective umbrella” was reformed, making criminal groups parasitically dependent on political support for their survival in an authoritarian state. However, the newly consolidated hierarchy effectively made the pre-existing cadre-gangster relationship endure as long as the party’s authority is not threatened. These relations are mostly acknowledged at the lower to mid-levels of government, but major figures in CCP leadership have praised “good people” and “patriotism” among the triads in the past, and several have promoted Beijing’s interests abroad, for example in the Americas and Asia.
From the core to the periphery
The Southeast Asian SEZs linked to China have presented an opportunity for TOC groups. Xi’s anti-corruption projects in the mainland seem to have sparked a degree of outward mobility by the triads from the authoritarian domestic core towards the more liminal and experimental periphery of Chinese influence. There, corrupt practices as well as diplomatic and trade ties create an enabling environment for TOC within the legal limbo of SEZs. Officials in host states commonly take pride in cultivating ties with individuals or organisations presenting themselves as symbolically tied to the Chinese state. Operating in the periphery means the Chinese state is usually willing to be more lenient, at least for some. If the examples of Chang An-lo (“White Wolf”) in Taiwan, Wan Kuok-koi (“Broken Tooth”), and Zhao Wei in Southeast Asia's SEZs show us anything, it is that strong displays of patriotism and political support give more freedom to act without the CCP taking police action. This has enabled the development of a networked system of criminal exploitation that affects people from across the region and beyond.
Regarding the case of Malaysian workers being held for ransom in the GTSEZ, various embassies have attempted to help with the release of the trafficked persons, with Malaysia’s Foreign Minister Saifuddin Abdullah being a key figure pushing for action, and Thailand and Cambodia pledging to address the issue. Yet given the scale of criminal operations in Laos’ GTSEZ, Laotian labour officials have seemed powerless to address human rights abuses, unable to meaningfully change the system as a whole, and only manage to occasionally rescue a few trafficked persons. Laotian police also seem paralysed, debating whether or not to get involved at all.
Concerning the broader issue of relations between Southeast Asian SEZs, TOC, and the CCP, Cambodian authorities have done the bare minimum to address the criminal supply chain, leadership, and funding of Chinese crime syndicates, while Hun Sen has feigned ignorance. In Malaysia, protests by rights groups so far focus on the Laotian embassy, but a few have been directed at the one state which might have the power to act on the situation: China. Examples of successful crackdowns and arrests of criminal groups operating across Southeast Asia’s SEZs have only come from Chinese authorities or through their assistance.
China is not the first state to be accused of complicity in TOC to advance geopolitical objectives, but the emerging link between Chinese-supported SEZs and TOC is concerning. The Malaysian state has shown itself to be less hesitant than others to crack down on Chinese gangs, with leaders more willing to voice their concerns. The APEC 2022 forum offers an opportunity to cooperate with other regional states to protect their citizens from the perilous conditions many find themselves in once employed within these zones.
DISCLAIMER: All views expressed are those of the writer and do not necessarily represent that of the 9DASHLINE.com platform.
Author biographies
Marco Neveu is a postgraduate student at National Chengchi University in Taipei.
Charlie Thame is an Assistant Professor of International Relations at Thammasat University. Image credit: Wikimedia Commons/Slleong.