[Big read] Are Chinese tourists targeted by scam syndicates in Southeast Asia?

Lianhe Zaobao journalist Daryl Lim steps into the world of scam syndicates and scam hubs in Southeast Asia, particularly Myanmar, which is one centre of activity. How can the authorities clean up the industry so that tourists — especially from China — will return and boost the recovery of the tourism industry?
Thai police standing in front of some Thai nationals allegedly enslaved by scam gangs based in Cambodia. This picture was taken in Cambodia. (Tan Hui Yee/SPH Media)
Thai police standing in front of some Thai nationals allegedly enslaved by scam gangs based in Cambodia. This picture was taken in Cambodia. (Tan Hui Yee/SPH Media)

In 2018, Chinese businessman Cai Weijun from Taizhou, Zhejiang province, invested around 5 million RMB (US$684,000) to set up a plastic recycling factory in Lashio, Myanmar, for the processing and manufacturing of plastic.

Lashio is the second largest city in Myanmar’s northern Shan State, with deep historical and cultural connections to Yunnan, China. More than half of its population of over 300,000 people are of Chinese descent, making it one of the towns in Myanmar with the highest proportion of Chinese residents, and where Chinese education and culture is most widespread.

Cai told Lianhe Zaobao that many Chinese business people choose to operate in Lashio due to the relatively low labour costs and the availability of Chinese-speaking workers. However, he never thought that these characteristics of Lashio would also attract the attention of scam syndicates.

Cambodia also began cracking down on telecommunications scam activities in the second half of last year, prompting telecommunications scammers to shift base across borders again, this time to Myanmar.

Shifting bases for scams

After the telecommunications scam syndicates from Taiwan faced a crackdown in mainland China, they started moving to places such as Sihanoukville in Cambodia five years ago. These lawbreakers would remain in the thick of the action, often engaging in illegal activities besides scams, such as gambling, murder, human trafficking and false imprisonment.

Under public pressure, Cambodia also began cracking down on telecommunications scam activities in the second half of last year, prompting telecommunications scammers to shift base across borders again, this time to Myanmar.

In fact, several years ago, some scam syndicates had already set their sights on the “Golden Triangle” in northern and southeastern Myanmar.

scam hub
A scam hub in northern Myanmar. (Courtesy of interviewee)

Myanmar implemented a new Gambling Law in 2019, allowing foreigners to legally register and operate casinos in the country. This new law, combined with the rapid development of mobile technology, further accelerated the growth of gambling and fraud in northern Myanmar.

Attractive salaries at scam hubs

Cai Weijun recalled that he first heard about scam hubs in Myanmar in early 2020. At that time, the Covid-19 pandemic was raging and many Chinese business people in Myanmar were struggling. However, a friend who was doing business in Yangon told Cai that he planned to set up a “branch” in Myawaddy, in southeast Myanmar.

Cai shared, “At that time, I was puzzled and didn’t understand what kind of business opportunities there could be in Myawaddy, an area with little regulation. It was only after I probed my friend that I found out his so-called major project was actually a scam hub.”

“I know young Myanmar workers who used to work in administrative roles, or as tour guides or translators. Now, almost all of them work in scam hubs.” — Cai Weijun, Chinese businessman in Myanmar

The rise of scam hubs in northern Myanmar had a significant impact on the recruitment of employees for Cai’s company. Due to the closure of land border crossings during the pandemic, goods could not be exported to China, and many factories were forced to shut down. Many Myanmar employees who lost their jobs jumped at the chance to work in scam hubs, where they could even earn better salaries. By the time the pandemic was over, they were not willing to return to their previous jobs.

Cai said that these employees generally earned only about 1,500 RMB in his factory. However, once they moved to the scam hubs, their income increased by at least five times. When “results” were good, they could earn up to 200,000 RMB per month including commissions.

He added, “I know young Myanmar workers who used to work in administrative roles, or as tour guides or translators. Now, almost all of them work in scam hubs.”

Chinese business people targeted

What frustrates Cai even more is that the masterminds behind the scam hubs in northern Myanmar are from China, leading locals to believe that all Chinese business people in Myanmar are involved in scams and earning a lot of money. As a result, many people — especially government officials, and military or police officers with law enforcement powers — start targeting Chinese business people.

Cai said, “They see Chinese people as walking renminbi, an opportunity for extortion. They find various reasons to report us and try to get money from us.”

In May last year, Cai was even kidnapped by a former employee who demanded a ransom of 300,000 RMB in exchange for his release. He said, “Fortunately, at the time I was able to contact a friend with some influence in the area. He was ready with a gun when he met me. So, I managed to escape from the kidnappers.”

With this experience, Cai began to reconsider whether he should continue doing business in Myanmar. He said, “The situation here is not going to get better very soon, and I would probably lose my investment. To put my family at ease, I may have to give up and start over back in China.”

... at least 120,000 people were forced to work for scam syndicates in Myanmar. These victims included not only Chinese but also individuals from Southeast Asia and even African and Latin American countries.

Victims and voluntary workers at scam hubs

The victims of scam activities in northern Myanmar include legitimate business people like Cai and individuals who lost money due to scams, as well as Chinese citizens who were deceived into engaging in telecommunications scams in the area.

In recent years, there have been occasional media reports of the many victims who were rescued and who had returned to China. They revealed that they were lured to northern Myanmar by offers of “high-paying jobs”, and faced punishments such as starvation, physical abuse and electric shocks if they performed poorly.

In August this year, the United Nations cited “reliable information” that at least 120,000 people were forced to work for scam syndicates in Myanmar. These victims included not only Chinese but also individuals from Southeast Asia and even African and Latin American countries. Many are well educated with professional backgrounds, computer skills and proficiency in multiple languages.

The news about a Dr Zhang of the Chinese Academy of Sciences who was rescued in September after being trapped in Myawaddy for over a year was also on Weibo’s top searches for several days.

A Chinese volunteer named Long (pseudonym), who was involved in the rescue operation for Zhang, has saved more than 200 victims from scam hubs in Cambodia and Myanmar in the past few years.

scam hub
A scam hub in Myawaddy, a township located on the border of Myanmar and Thailand. (Courtesy of interviewee)

When interviewed, Long said frankly that rescue operations in Myanmar were more difficult than in Cambodia, mainly because the local situation is much more complicated.

He explained that because of the unstable political situation in Myanmar, most foreign scammers can only enter the country illegally through intermediaries, which increases the cost of hiring for the scam hubs. Hence, the scam syndicates would demand higher ransom payments in exchange for the release of their victims.

Long said, “If the victims enter the country through legal channels, the cost of an air ticket and ordinary transportation fees is at most 10,000 to 20,000 RMB. But once illegal entry is involved, the figure can range from 100,000 to 400,000 RMB. Also, the compensation includes various expenses incurred by these people while in the scam hubs.”

"...most individuals engaged in scams find it profitable, and once they have earned money, they do not want to leave." — Long, volunteer rescuer

He added, “While the Myanmar military junta is actively cooperating in cracking down on telecommunications scams, their capacity is limited because most of northern Myanmar is not under the central government's jurisdiction. Local armed groups directly benefit from the proceeds of the scam hubs, so they are not very willing to cooperate with rescue operations.”

Long lamented that the biggest problem currently is the unchecked expansion of the scam industry in northern Myanmar, with many individuals voluntarily working in these scam hubs.

He said, “Media reports often focus on the victims rescued from the hubs, but we cannot ignore the fact that the number of people seeking help accounts for less than 1% of the total number of people in the hubs. This indicates that most individuals engaged in scams find it profitable, and once they have earned money, they do not want to leave.”

Transnational joint efforts

Over the past month, China and Myanmar have conducted multiple rounds of joint anti-telecommunications scam law enforcement, apprehending over 2,300 scam suspects.

Interviewed academics believe that improving the employment situation and economic environment in China is the long-term solution to combating scam syndicates.

Following the consensus reached in late August between China and Myanmar on joint efforts against cross-border telecommunications scams, law enforcement agencies from both sides began joint law enforcement operations against scam hubs in northern Myanmar in early September, smashing several scam bases. The joint law enforcement also involved the Wa State government, which is not under the jurisdiction of the central Myanmar government.

As of 10 October, as many as 2,317 scam suspects have been arrested in northern Myanmar and repatriated to China, including financers, key leaders and cadres.

 ... improving the employment situation for young people in China and the overall economic environment are the long-term solutions to combat scam syndicates... — Zhang Yun, Director, Southeast Asia Research Institute, Jinan University

victims
As of 10 October 2023, 2,317 scam suspects have been arrested in northern Myanmar and repatriated to China. (Chinese Ministry of Public Security/CNS)

Law enforcement agencies from China, Thailand, Myanmar and Laos previously launched a special joint operation in mid-August, establishing a coordination centre in Chiang Mai, Thailand, to combat gambling scams and related crimes such as human trafficking, kidnapping and illegal detention. This marked a new phase in multinational joint law enforcement action, following the “Mekong River massacre” case in 2011.

Zhang Yun, director of the Southeast Asia Research Institute at Jinan University, told Lianhe Zaobao that the coordination centre could play a role in intelligence sharing, as well as joint efforts in solving major cases, deployments and arrests, enabling more precise action against cross-border telecommunications scams.

He added that the coordination centre could overcome the previous limitations faced by Chinese law enforcement in cross-border operations. “The Myanmar central government has no jurisdiction in most areas of northern Myanmar, but through this mechanism, China can work directly with local forces to combat telecommunications scams,” Zhang said.

Volunteer rescuer Long believes that from an official perspective, the joint law enforcement efforts over the past month have been a significant victory and have had some deterrent effect on the scam industry. However, he admits that it is too soon to say that the situation has improved.

He said, “For an industry involving 500,000 to 600,000 people, do you think arresting 2,000 to 3,000 individuals will make a dent? There are more people than that in a single hub, not to mention the thousands of small and large hubs across northern Myanmar.”

Long-term solutions

In addition to increasing anti-scam awareness and law enforcement actions, Zhang Yun believes that improving the employment situation for young people in China and the overall economic environment are the long-term solutions to combat scam syndicates and get to the root of the problem.

Zhang explained that whether one falls into a job scam or becomes a victim who gets cheated of their money, ultimately the temptation is driven by the dissatisfaction with their current situation and a desire to make a quick buck. He added, “Scam groups exploit this psychology to lure the victims. But if these people have good employment opportunities in China, they won’t feel the need to go abroad and take risks.”

“As long as there are people who are greedy and unwilling to work hard, they won't stay grounded and earn money through honest means... it’s all about greed and pushing one’s luck.” — Long

border
In this file photo taken on 5 July 2021, motorists pass the China-Myanmar border gate in Muse in Shan state. (AFP)

He suggested that China should step up talent exchange with Southeast Asian countries, particularly in the fields of manufacturing, technology, finance and energy. Through technology transfer and knowledge sharing, this could promote local industrial upgrades and technological innovation. He said that if local employment conditions are better than what the scam industry offers, it might be possible to prevent people from getting caught in these scams.

However, Long is pessimistic. He feels that regardless of the economic situation, there will always be individuals who want to make fast money without effort. This is a reason the scam industry has been able to survive for so long.

He said, “As long as there are people who are greedy and unwilling to work hard, they won't stay grounded and earn money through honest means. All of their misfortunes are due to their restless hearts — it’s all about greed and pushing one’s luck.”

Fake news about tourists becoming victims of organ trafficking or kidnapping while travelling in Thailand occasionally comes up on Chinese social media...

Misinformation and misconception

Scam activities shifting bases across countries has affected Southeast Asian tourism. Negative news about scam hubs has deterred Chinese tourists from visiting Thailand and Cambodia, leading to sluggish post-pandemic recovery for the local tourism industry. Experts emphasise that the likelihood of tourists becoming victims of organ trafficking or kidnapping is extremely low and mostly based on misinformation.

Over the past ten years, Thailand has been a popular destination for Chinese tourists. In 2019, over 11 million Chinese tourists visited Thailand, accounting for more than a quarter of all tourists to the country. The tourism industry accounted for 11% of Thailand’s GDP, providing employment for 20% of the population, making the return of Chinese tourists crucial for the country’s economic recovery.

However, the post-pandemic recovery of Thailand’s tourism industry has not been as robust as expected. The latest data from the Tourism Authority of Thailand show that during the first nine months of this year, only around 2.3 million Chinese tourists visited Thailand, the first time in ten years that China was not the largest source of visitors to the country.

AFP reported that Sisdivachr Cheewarattanaporn, president of the Association of Thai Travel Agents, feels that negative online chatter about Thailand is one of the reasons for the decline in the number of Chinese tourists.

Fake news about tourists becoming victims of organ trafficking or kidnapping while travelling in Thailand occasionally comes up on Chinese social media, and some Thai media reports stated that many unscrupulous internet celebrities use such fake news to attract attention and generate online traffic.

Movies Lost in the Stars (消失的她) and No More Bets (孤注一掷), released in China in June and August this year respectively, feature gambling scams and criminal activities in Southeast Asia, thus adding to the misconception. While no specific countries were mentioned, the scenes in the movies were reminiscent of countries like Thailand and Cambodia. Hence, safety while travelling in Southeast Asia became a hot topic of online discussion in China.

visa
Chinese tourists arrive during a welcome ceremony of the first batch of Chinese tourists under a five-month visa-free entry scheme at Bangkok's International Airport, Thailand, on 25 September 2023. (Athit Perawongmetha/Reuters)

Zhou Huixiong, a 35-year-old programmer from Shenzhen who travelled to Thailand during China’s recent Golden Week holiday, feels that all the negative information has been amplified by internet public opinion, whereby the reality is actually a different story. He said, “My latest experience of travelling in Thailand was good, and it didn’t feel different from previous trips, except for the shooting incident (in Bangkok’s Siam Paragon shopping mall on 3 October). Security was not a problem either.”

According to Zhou’s observations, there were in fact quite a number of Chinese people who spent the Golden Week holiday in Thailand. Flights to Bangkok as well as hotels and tour groups were fully booked, and the tourists were mostly Chinese.

To attract more Chinese tourists, Thailand implemented a visa-free policy for Chinese tourists starting from 25 September. Authorities expect this five-month visa-free policy to attract 2.9 million Chinese tourists to visit Thailand, bringing in 140.3 billion Thai baht (US$3.85 billion) in revenue.

Less willing to spend on travel

Cambodia, which has been plagued by scam scandals in recent years, is not as optimistic. Singaporean businessman Andrew Tay, who has been operating a hotel in Phnom Penh for over 20 years, lamented that negative news about Cambodia has caused a sharp drop in the number of Chinese tourists, with many hotels in the area having an occupancy rate of only 30% to 40%.

He said, “We are not feeling the boost in the tourism industry from the Golden Week holiday at all. These films were released right before the Golden Week holiday, and the issue of safety wiped out people’s desire to travel to Cambodia.”

Lei Xiaohua, deputy director of the Southeast Asia Research Institute at the Guangxi Academy of Social Sciences, assessed that besides security concerns, the primary reason for the weak recovery of the tourism industry in Thailand, Cambodia and Southeast Asia in general is that China is facing downward economic pressure, which has led to people being less willing to spend on overseas travel.

"Many victims and kidnappers know each other. In all my years involved in rescues in Southeast Asia, I have never encountered a case where a tourist was kidnapped from the street and taken to a scam hub." — Long

golden week
China tourists at a temple in Bangkok, Thailand, on 4 October 2023. (CNS)

Official data released by China on 7 October showed that the number of Chinese tourists travelling abroad during the Golden Week holiday had only recovered to 85% of the pre-pandemic level in 2019.

Regarding the online rumours smearing Southeast Asian countries, Lei believes that China and the affected countries can ramp up promotion of their tourism industry through various media. China should also provide immediate guidance on the false information circulating on the internet to prevent negative public opinion from festering and spreading.

Volunteer rescuer Long emphasised that almost all news involving innocent Chinese tourists being targeted by scam syndicates in Thailand and Cambodia are untrue or taken out of context.

He said, “99% of kidnapping cases have to do with the grey industry [businesses bordering on illegality]. Many victims and kidnappers know each other. In all my years involved in rescues in Southeast Asia, I have never encountered a case where a tourist was kidnapped from the street and taken to a scam hub.”

Long explained that to keep running for the long term, scam hubs basically adhere to the rule of not contacting the outside world. He said, “They keep a low profile and hope to make a fortune in the hub, focusing only on what happens inside the hub and not getting involved in anything outside.”

This article was first published in Lianhe Zaobao as "幕后老板中国人 很多人都是自愿 缅甸诈骗园区 为何难以整治?".

Related: Chinese scam rings in Cambodia drawing recruits from Southeast Asia | How Fujian’s tea capital became known as a 'scam town' | Kidnapped and abducted, Chinese nationals are falling victim to cross-border crimes in Cambodia