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Myanmar Rebel Offensive Helps China's Cybercrime Crackdown

FILE - Members of the Myanmar National Democratic Alliance Army pose with the group's flag in front of the Kunlong bridge in Shan state, Myanmar, Nov. 12, 2023. An offensive against the junta in Myanmar is helping China punish scammers.
FILE - Members of the Myanmar National Democratic Alliance Army pose with the group's flag in front of the Kunlong bridge in Shan state, Myanmar, Nov. 12, 2023. An offensive against the junta in Myanmar is helping China punish scammers.

Myanmar rebels have launched a series of coordinated attacks known as “Operation 1027” that outside analysts say have given them new momentum in their struggle against the military junta. The operation also reportedly aligns with China’s interest in cracking down on transnational crime in the region, particularly cybercriminals who target Chinese consumers.

“Just as Operation 1027 kicked off, the Chinese side started to really wake up to just how horrific some of the impacts of all of this criminal activity that is going on, under the protection of the Myanmar army, actually are for China,” Jason Tower, Myanmar program director for the United States Institute of Peace, a U.S. government funded think tank, told VOA via Zoom on Tuesday.

Operation 1027, named after the date of its commencement, is being spearheaded by the Three Brotherhood Alliance, which includes the Myanmar National Democratic Alliance Army, MNDAA, the Ta’ang National Liberation Army, TNLA, and the Arakan Army or AA. The U.S. institute of peace says in a report this month that the coordinated rebel offensive has made swift gains across the region, overrunning more than 100 junta outposts, and capturing at least four towns, including an important border crossing with China.

The offensive targets pro-junta militias and military-sponsored Border Guard Forces or BGF that run the Kokang Self Administrative Zone or SAZ, which the MNDAA administered until it was ousted by the Myanmar military in 2009.

“The Chinese government has started to fight cybercrime more forcefully since September” Li Kya Win, a spokesperson for MNDAA, told VOA via Telegram on Thursday. “Ethnic armed groups along the border have also become deeply involved in China's efforts to curb the criminal enterprises and the trafficking of Chinese nationals.”

Rebels claim that despite Chinese pressure, the Burmese-junta-aligned security forces have done little to go after the criminals that Beijing is concerned about.

Rebel spokesperson Li Kya Win says, “The Kokang BGF have not been deeply involved in the crackdown on online scam syndicates, many of which are located in the SAZ. Only after we started the 1027 operation,” Win added, “the Kokang BGF felt pressure to do something against the cybercrime kingpins. Therefore, we are the ones who are actually implementing the shutdown of this lucrative criminal activity along the Chinese border.”

The rebel crackdown has also led to the release of Chinese nationals and others who were being detained by online scammers, according to Jason Tower.

“With the MNDAA coming in and taking all these positions, it's maximized pressure on the military, and the military has no choice but to release people from these scam compounds. You're now seeing thousands of people coming out of the Kokang areas going over back to China, and the MNDAA is playing a very active role along with the Brotherhood Alliance in eradicating these scam syndicates,” said Tower.

Massacre before 1027

Chinese support for the 1027 operation was reportedly spurred by a mass killing at one of the scam centers in the Kokang SAZ last month (October 20).

“Scores of Chinese nationals were murdered by Border Guard Force police as they tried to escape from a scam center compound,” Tower told VOA. “And I think that is really the reason why you saw China give support to the MNDAA and the Brotherhood Alliance.”

The incident was not widely reported at the time. VOA reached out to local news media for more context. An editor of an independent local news agency based in northern Shan state responded with details of the massacre. His name is being withheld for safety reasons.

“On October 20th, when the news came out that the MNDAA and its allies were going to attack Kokang’s capital Laukkai,” the editor told VOA by phone, “the detainees in the compound owned by Ming Xuecheng, a former official of the Kokang SAZ and a former member of the pro-military Union Solidarity and Development Party (USDP) in the Shan state parliament, were moved to another safe location. At that time the detainees tried to run away and were shot and killed by the security team.”

"At least 60 people died," the editor told VOA. “There were a lot of Chinese nationals among them. At least four Chinese intelligence officers who were working undercover in this compound were among those listed as killed."

VOA has been unable to independently confirm the account. Analyst Jason Tower says approximately 100 foreign nationals, mostly Chinese, died during the escape attempt. Tower said it occurred in the “Hiding Tiger Mountain Villa,” a compound owned by Ming Xuechang, a notorious cybercriminal whose son is a colonel in a junta-aligned military unit.

“The government of Lincang, a nearby Chinese city, sent a strongly worded letter the next day demanding an investigation,” Tower added. “This was ignored by the [Myanmar] military -- and this is what caused the Chinese government to agree to operation 1027.”

Ringleader kills himself to avoid arrest, junta says

A statement released November 11 by the Ministry of Public Security’s Criminal Investigation Bureau said arrest warrants had been issued for all of the Ming family members involved in criminal activities in the region.

Among them were Ming Xuecheng, his son Ming Guoping, and two other Ming family members from Zhenkang County, which lies directly across the Chinese border from Kokang.

The statement went on to say that an investigation by Chinese police found the family members are, “ringleaders of a criminal group involved in telecommunication network fraud in the Kokang Autonomous Region in northern Myanmar.” The statement says that they are also suspected of “intentional homicide, intentional injury, illegal detention and other serious crimes.”

An audio clip released on Friday by Myanmar Junta spokesperson, Major General Zaw Min Tun, said that police in the Kokang SAZ had moved to arrest the four Ming family members in Laukkai city on November 16th, but the 69-year-old Ming Xuecheng, who was “the mastermind of an online scam ring,” killed himself during the arrest attempt by shooting himself with a pistol. The body of the deceased ringleader was surrendered to Chinese authorities on November 17th, along with the other family members, the spokesperson said.

“We are working together to eradicate online fraud,” the audio statement continued. “We have conducted investigations all around Shan State and the autonomous region.

The statement claimed authorities arrested 286 people in total, including 270 Chinese nationals, 13 Myanmar nationals, 2 Malaysians, and one Vietnamese.

China’s Myanmar Challenge

It remains to be seen if this operation constitutes a change in Beijing’s relations with Myanmar factions fighting in the country’s civil war.

“China is facing a dilemma,” Than Soe Naing, a China-Myanmar expert and former member of the Communist Party of Burma, told VOA via Zoom. “They are not sure if the Brotherhood's operation will succeed or not. The Brotherhood Alliance do not yet control the Kokang SAZ completely.

At the same time, from China’s perspective,” Naing says, “the junta did act on the demands of the Chinese government. In addition, the losses China faces from online fraud are not as big as the current trade revenue losses caused by the latest actions near their border.”

“China’s seeing some successes in this,” says Jason Tower, “but it’s coming with costs, because now you’re seeing that the border trade has basically been shut down between the two countries.” However, the military junta, according to Tower, was already losing control of major trade routes before Operation 1027 and had not been able to foster key economic investments by China because of a lack of competent governance by the junta.

“The military completely failed when it came to cracking down on crime,” he says, “At the end of the day, the military is one of the key enablers of all of that criminal activity.”