The China Brief: Rebels Target Cyber Scams, Xi’s Crackdown, Taiwan’s Elections, and More
This week, anti-government forces in Myanmar took control of Laukkai, the capital of Kokang region, which borders China. The offensive by the Three Brotherhood Alliance, a coalition of ethnic militias, has been successful, altering the dynamics of Myanmar’s ongoing civil war. While China has supported Myanmar’s ruling military junta since the 2021 coup, it now appears to be playing both sides, engaging with the rebels while maintaining communication with the government.
The Three Brotherhood Alliance’s focus on telecom scam operations is a factor in this shift. Laukkai serves as a hub for these scams, known in China as “pig butchering,” which involves deceiving victims and stealing their money. The alliance’s targeting of these operations has disrupted a lucrative criminal racket that takes advantage of cross-border transfers and cryptocurrency. The military coup in Myanmar in 2021 provided further opportunities for these criminal activities, leading to the enslavement of Chinese citizens by the gangs running the scams.
These criminal operations have been a source of tension between Myanmar and China, with the latter growing increasingly impatient with the former’s failure to crack down on the scams. Despite this, it is unlikely that China will completely abandon Myanmar’s junta, as it continues to navigate the complex situation to protect its citizens and business interests.
In a meeting at the internal discipline agency of the Chinese Communist Party, President Xi Jinping pledged “no mercy” and further crackdowns against corrupt officials. This comes amid a record number of purges of top officials in 2023 and a renewed focus on military corruption. However, anti-corruption campaigns can create nervousness among businesses and undermine the systems that rely on unofficial workarounds.
Taiwan is preparing for elections, with a victory for the ruling Democratic Progressive Party likely. The outcome could lead to provocative military maneuvers from China, which has been increasing pressure on the island. However, the DPP may not retain control of Taiwan’s parliament, limiting the incoming leader’s power.
The U.S. may target China’s semiconductor industry, particularly older models of chips, in an ongoing trade and technology war. China, in return, has imposed sanctions on five U.S. defense firms in a largely symbolic move. Economic concerns persist in China, as fears of government crackdowns and industry contagion continue to impact the stock market.
These developments reflect the complex and interconnected nature of China’s relationships with its neighbors, its internal governance, and its global economic ambitions.