Myanmar Transnational Crime and War

Myanmar, the Southeast Asian nation formerly known as Burma, is responsible for a highly intricate web of transnational crime.

Myanmar, the Southeast Asian nation formerly known as Burma, is responsible for a highly intricate web of transnational crime. This includes a wide range of illicit activities such as drug trafficking, money laundering, human trafficking, weapons smuggling, kidnapping, prostitution, gambling, cybercrime, and telephone scams. The involvement in these activities extends to various entities, including both state and non-state actors, making the situation particularly complex.

Transnational Crime

Criminal activities originating from Myanmar are predominantly carried out by Chinese criminal organizations. These groups operate with the support and collaboration of ethnic armed organizations (EAO) involved in Myanmar’s protracted civil war, which has endured for over 70 years. Displaced locals, affected by the ongoing conflict, are becoming more inclined to work for these criminal organizations. Consequently, opium cultivation has surged by 33% since 2021. The heroin produced, coupled with locally manufactured methamphetamine, is trafficked and distributed across Southeast Asia, reaching countries such as Laos and Vietnam, and making its way to Australia and Europe.

The economic slowdown in China and Southeast Asia has heightened the susceptibility of citizens to telephone scams and human trafficking. People are falling prey to schemes promising quick wealth, while others, enticed by the prospect of well-paid employment, find themselves trapped in slavery. In the initial quarter of this year, Chinese authorities dismantled 790,000 scam websites and apprehended 10,923 individuals involved in these activities.

Illicit activities revolve around Chinese-supported special economic zones located within Myanmar, particularly in regions like Kokang and Lashio, as well as Boten and Bokeo in Laos. These zones of criminal activity are shielded by Myanmar border guard forces or ethnic armed organizations that are presently observing a ceasefire with the government.

The Myanmar conflict not only showcases the varied nature of transnational crime organizations but also underscores the convergence of terrorism, covert actions by sovereign states, organized crime, and military insurgency. China’s engagement in the war involves economic support for the military junta. China’s interests in the conflict extend to acquiring low-cost raw materials, resources, forest products, and energy. Consequently, Chinese investment projects encompass areas such as gas pipelines and infrastructure projects. Given the substantial sanctions on the junta, China has emerged as the primary trade and investment partner for the country.

Furthermore, China is aiming to utilize Myanmar as a strategic gateway to the Bay of Bengal in the Indian Ocean. The China Myanmar Economic Corridor (CMEC), a key component of China’s global infrastructure initiative, the Belt and Road Initiative (BRI), involves a rail connection stretching from China’s Yunnan province to Kyaukphyu Port in Rakhine State. The People’s Liberation Army (PLA) has established a listening post or spy base on Myanmar’s Great Coco Island in the Bay of Bengal. The presence of PLA troops on the island, along with increased PLA-Navy activities in the Bay of Bengal, poses a threat to the national security of both the United States and India. This has led the two nations to enhance their defense cooperation through the Quadrilateral Security Dialogue, known as the Quad.

Actors and Interests

The junta, which seized control of Myanmar in 2021 by ousting the duly-elected Nobel Prize Winner Aung San Suu Kyi, relies heavily on China for economic support. Chinese trade and investment contribute to funding the junta’s ongoing conflict against ethnic armed organizations (EAO) which are fighting for an end to genocide and a return to democracy. Beijing, known for its aversion to democracy and human rights concerns, prefers dealing with strongman dictators who maintain complete control over a country, as it makes investments more secure and manageable. In the case of Myanmar, China favors the continuity of the junta and opposes the country descending into chaos or establishing a democratic government. To ensure the junta’s stability, both Russia and China are the primary suppliers of weapons to the Tatmadaw, the Burmese Army.

Transnational crime organizations are motivated by money, while ethnic armed organizations (EAO) are interested in receiving payment, in the form of taxes, to protect or allow transnational crime activities to take place. This money is then used by the EAOs to buy weapons and support their insurgency against the government. Chinese transnational crime organizations are largely based in the Chinese province of Yunnan but also have corporate offices in Hong Kong, where they engage in a variety of legal and illegal activities, including real estate development. Given how closely Beijing monitors its own citizens, it is extremely unlikely that the central government is unaware of these activities. Ostensibly, Beijing could easily stop them if it wished to. This suggests that there is complicity between the transnational crime groups and the government. More broadly, it is hypothesized that Beijing turned a blind eye to the crime as long as it furthered Beijing’s strategic interests and did not spill over into Mainland China or interfere with Chinese investment projects in Myanmar.

In recent months, however, it has become known that large numbers of Chinese citizens have fallen prey to telephone scams associated with these criminal enterprises. Additionally, Chinese citizens have been trafficked into Myanmar to work in telephone scam centers or brothels. These developments have prompted Beijing to take action against the criminal organizations.

China’s Dilemma

Another complication in this intricate web of illicit interests is that during the COVID lockdown years, Chinese investment projects in Myanmar came to a standstill. Now that restrictions have been lifted and the Chinese economy is experiencing a severe downturn, Beijing aims to resume the China-Myanmar Economic Corridor projects. However, criminal gangs, aligned ethnic armed groups, and border guard forces are now obstacles in their path. Additionally, in recent months, unity among anti-junta groups has strengthened, with more alliances forming, coordinated attacks being launched, and territorial gains being made. Some of these groups now pose a direct threat to Chinese interests, prompting Beijing to pressure the junta to suppress these groups. However, recent successes by the rebels raise doubts about the junta’s ability to regain control over these areas.

David Eubank, a former U.S. Special Forces officer and founder of the Free Burma Rangers, expressed in a remote interview that he believes the rebels now control 50% or more of the total landmass of Burma. While the junta still retains control over most major cities and towns, the rebels hold the land in between. It is currently uncertain whether the junta will succeed in displacing the rebels from the areas surrounding the Chinese projects.

A wildcard in the conflict is the United Wa State Army (UWSA), one of the fiercest, largest, and most powerful ethnic armed organizations. In addition to engaging in extensive trade with China, the UWSA has maintained a long-standing ceasefire with the government. Recently, they have been assisting China by apprehending online scammers and delivering them to Chinese authorities. Simultaneously, the UWSA manufactures and sells weapons to the ethnic armed organizations (EAOs) that are in conflict with the government and oppose Chinese interests.


The transnational crime situation in Myanmar is highly intricate, encompassing a broad spectrum of illicit activities and involving numerous actors, both state and non-state. Halting transnational crime may prove impossible until the war concludes. Observers like David Eubanks suggest that if the junta appears to be on the verge of collapse, the United Wa State Army (UWSA) could join the fight, supporting the rebels. However, the impact of this on transnational crime or on China’s interests in the country remains uncertain. It is possible that the UWSA will continue to collaborate with China, potentially even taking control of transnational crime operations or allowing them to persist while imposing taxes.

There is also the possibility that, following the fall of the junta, the United Wa State Army (UWSA) would persist in safeguarding and supporting Chinese projects in the nation. However, it’s worth noting that the UWSA’s geographical reach is constrained, and it may not have the capacity to protect every Chinese project along the entirety of a pipeline or railway system.

Moreover, if democracy is restored, the new government is likely to initiate a crackdown on transnational crime, although success in this endeavor is not guaranteed. A democratic government may also be less inclined to cooperate closely with China, but this doesn’t necessarily imply the demise of the China-Myanmar Economic Corridor. It might signify an increase in costs for China and the loss of its near exclusivity. Conversely, a democratic government is more likely to engage in security cooperation with the United States and India. This could potentially curtail People’s Liberation Army (PLA) access to Myanmar, including its territorial waters.

Antonio Graceffo
Antonio Graceffo
Antonio Graceffo, PhD. China-MBA, is a China economic-analyst who has spent over 20 years in Asia, including 7 in China, and 3 in Mongolia, where he teaches economics at the American university. He is a graduate of Shanghai University of Sport and Antai College of Economics & Management, Shanghai Jiao Tong University. Additionally, he conducted three years of post-doctoral studies at School of Economics Shanghai University, focusing on U.S.-China trade, and currently studies national security at the American Military University. He is the author of 5 books about China, including Beyond the Belt and Road: China’s Global Economic Expansion and The Wushu Doctor. His writing has appeared in The South China Morning Post, The Diplomat, Jamestown Foundation China Brief, Lowy Institute China Brief, Penthouse, and others. He is a frequent guest on various TV shows, providing China commentary on NTD network in the United States.