Myanmar’s Chinese Investment: The Face

Wan Kuok Koi, also known as “Broken Tooth,” was imprisoned in a top-security detention facility that had been specially erected on Coloane, one of the two islands that used to be a part of the former Portuguese colony of Macau off the coast of southern China. After a bomb went off in the minivan driven by Antonio Marques Baptista, often known as “Rambo,” the new crime-fighting director of the police department in the then-Portuguese region, he was detained in May 1998. There was never any proof shown in court indicating he was involved in the assault. In contrast, he was charged with loan-sharking, loan-theft, and suspicion of belonging to “an illegal organization” on previous accusations relating to the intimidation of workers at the Lisboa Casino in Macau.

In simple English, it indicated a triad, the covert organizations that are the Chinese Mafia. In November 1999, a month before Macau returned to Chinese control and became, like Hong Kong, a “Special Administrative Region” (SAR) of the People’s Republic of China, he was nonetheless sentenced to 15 years in prison and had all of his assets confiscated after a protracted and complicated trial in which witness after witness suffered from sudden bouts of amnesia and was unable to recall anything.

Wan was accused of running a number of bizarre businesses, some of which the jury made public during the trial. Among these was a weapons business in Cambodia, where he allegedly tried to trade in rockets, missiles, tanks, armored vehicles, and other types of military gear in the nation that was at the time racked by civil war. Few believed he would ever return as what he had always claimed to be—just “a prominent businessman”. But when he was given an early release in December 2012, that is precisely what took place. Wan had been incarcerated for 13 years and 10 months at that point.

Wan returned to the Macau casino industry using his previous contacts, and a few years later he introduced a cryptocurrency called Dragon Coin. He also founded three organizations that operate out of Cambodia: the Dongmei Group, whose official headquarters are in Hong Kong, the Hongmen History and Culture Association, and the Palau China Hung-Mun Cultural Association, which is purportedly situated in the Pacific Ocean country of Palau.

The labels made everything clear. The earliest subterranean triads that were established in the 18th century were known as Hongmen, or Hung Mun in Wan’s native Cantonese dialect. The US Treasury Department said on December 9, 2020 that the Hongmen History and Culture Association in particular quickly expanded its influence across Southeast Asia, first in Cambodia and subsequently in Myanmar. The casino enclaves around Myawaddy were built when a group of the Karen National Union and its Karen National Liberation Army (KNLA) split off, signed into ceasefire accords with the Myanmar military, and created the Border Guard Force (BGF). Wan’s Dongmei Group is a significant investor in these areas.

The first such outpost was Shwe Kokko, which was constructed on the remains of the defunct Kawmoorah, or Wangkha, a former KNLA military outpost that was captured by the Myanmar military in 1995. A former KNLA commander named Saw Chit Thu is the head of the BGF, which has obtained formal authority over the enclave. His army guards all operations at Shwe Kokko. The project, officially named as Yatai New City but more often referred to as “Chinatown,” was started in April 2017 and when finished is expected to feature luxury homes, hotels, retail malls, factories, trade centers, golf courses, casinos, and maybe an airport. The so-called Huanya International City and the Saixigang Industrial Zone, two further, comparable self-governing “special economic zones” close to Myawaddy, were established shortly after Shwe Kokko. Major investors in such initiatives include Wan’s Dongmei Group and its network of dubious affiliates. On the border between Myanmar and China, at Mong Pawk, southeast of the United Wa State Army’s Panghsang (Pangkham) headquarters, Wan is also known to be active in projects.

“The Dongmei Company itself appears to have incorporated as a business in Hong Kong on March 3, 2020, but is operating out of Kuala Lumpur,” said a study from the United said Institute of Peace from July 2020. Through the Hongmen Association’s official public WeChat account and in collaboration with a Huaguan Holding Company representative headquartered in Guangdong, Wan advertises the initiative.
It is clear that Wan has strong ties and is guarded by influential figures in China. “Wan Kuok Koi clearly has tremendous influence across China, Hong Kong, and Macau, close ties with the local government in Guangdong province, and very deep ties with the [Chinese Communist] Party’s united front organizations and Overseas Chinese Associations,” claims a researcher who is monitoring developments in Myanmar’s frontier regions. I think the Party views him as helpful in carrying out much of its political operations in Hong Kong, Macau, and Southeast Asia in general.

But how did a once incarcerated criminal and suspected capo of a gang rise to prominence as a powerful and apparently untouchable commercial tycoon? Criminals may not follow the law, but they have never existed outside of civilization. Law and crime have always coexisted, notably in China. In the years leading up to Hong Kong’s ultimate return to the “motherland” in 1997, the connections between officialdom and secret organizations became clear to the outside world. On April 8, 1993, in the then-still-British territory, Tao Siju, the head of China’s Public Security Bureau, delivered a casual news conference to a few of local reporters. Tao spoke about the triads after making it clear that the lengthy prison sentences of the “counter-revolutionaries” who had protested for democracy in Beijing’s Tiananmen Square in 1989 would not be reduced: “As for organizations like the triads in Hong Kong, as long as they are patriotic, as long as they are concerned with Hong Kong’s prosperity and stability, we should unite with them.” Tao also invited “the patriotic triads” to come to China to
The declaration shocked Hong Kong’s then-professional police force, and the still-independent media was in uproar. However, the inhabitants of Hong Kong should not have been taken aback. The founder of China’s economic reforms, Deng Xiaoping, has previously made hints that there could be ties between certain Hong Kong triads and the Chinese security agencies. Deng had made the argument that not all triads are harmful in a speech given in the Great Hall of the People in October 1984. He said that some of them were “good” and “patriotic”.

Before Hong Kong was returned to Beijing and citizens were allowed to show their support for pro-democracy organizations within China, a few “patriotic triads” served as Beijing’s eyes and ears there. They spied on labor unions and even the media, then relayed what they learned to the Chinese government. Masked men armed with wooden sticks and metal rods stormed a train station in Hong Kong in July 2019, when the city had been a supposedly self-governing SAR for more than two decades and residents were calling for democratic reforms. They attacked people who were returning home from a pro-democracy protest. In other instances, thugs were observed assaulting pro-democracy protesters and dismantling the barricades and tents they had erected. Naturally, nothing was done to stop the offenders.

Wan may have spent more than ten years behind bars in Macau, but he still matches the description of a “true Chinese patriot” and has therefore been helpful to China’s security agencies. The Belt and Road Initiative (BRI) is a global infrastructure project supported by China, and the World Hongmen History and Culture Association is a nationalistic group that supports the transfer of Taiwan to control by the authorities in Beijing, according to its public profile. The group has also denounced US “interference” in Chinese affairs and lambasted what it refers to as “separatists” in Hong Kong, or the territory’s pro-democracy movement.

Wan comes from a lowly background, much like many other leaders in Chinese organized crime. He was born in the Macau slums in 1955, joined one of the numerous violent juvenile gangs there at a young age, and reputedly still sports scars from his time spent in street fights. When he was shot, he suffered two serious wounds and

A rival gang with meat cleavers assaulted him. He acquired the moniker “Broken Tooth Koi” after losing multiple teeth in another altercation. Later, after moving through the street gangs’ ranks, he joined the 14K triad as a full-fledged member and finally ascended to lead its Macau branch. As a result, he oversaw a group of several hundred adolescent “horse boys,” also known as ma jai, who engaged in extortion and street protection activities that sometimes resulted in gunfights with rival gangs.

He even had a short verbal altercation with the reporters. Unusually attired in a striped suit, boldly designed shoes, flashy silk shirts, and with a couple of mobile phones attached to his belt, he could be seen dining with his men at the most upscale restaurants in Macau. In early 1997, an unsigned letter was sent to several local newspapers warning: “Warning: From this day on it is forbidden to mention Broken Tooth Koi in the press, otherwise bullets will have no eyes and knives and bullets will have no feelings.” Prior to his incarceration in 1998, he was untouchable; now, he looks to have reestablished, if not already done so, a functioning relationship with Chinese authorities.

Wan, who is now wealthy and free, got his shattered teeth restored and can proudly grin at his new global business empire. His complex web of global businesses includes interests in Myanmar’s border regions, but worldwide public and private detectives following his movements are not persuaded by what he says are selfless pursuits of pleasure. Wan asserts that his main involvement in Cambodia is the creation of educational institutions where people may learn more about “Chinese culture.” In contrast, according to the US Treasury, he is “a leader of the 14K triad,” which is involved in “drug trafficking, illegal gambling, racketeering, as well as bribery, corruption, and graft.”

The Irrawaddy was unable to reach Wan for this article, but the Treasury Department has announced that it has blocked any holdings he may have in the US and banned all transactions between him and US citizens under the G-20. The Treasury Department continued by accusing him of “corruption, including misappropriation of state assets, the expropriation of private assets for personal gains, and corruption related to government contracts or the extraction of natural resources.” The legislation was first signed into law by then-US President Barack Obama in 2012. It is named after Russian tax lawyer Sergei Magnitsky, who passed away in a Moscow jail in 2009. It was amended in 2016 to allow the US government to penalize human rights violators throughout the globe, seize their assets, and prevent them from entering the US. The World Hongmen History and Culture Association, the Palau China Hung-Mun Cultural Association, and the Dongmei Group were placed on a sanctions list and blacklisted by the Treasury Department at the same time.

Wan’s networks are involved in profitable endeavors in both the Saixigang Industrial Zone and the Huanya International City, and Shwe Kokko quickly developed into a center for all kind of criminal businesses. Casinos are excellent platforms for money laundering, and international smuggling is common. After being seduced by claims of well-paying positions “in the IT industry” in Thailand, hundreds of individuals from countries as far as Kenya and India ended up working in internet fraud schemes sponsored by Chinese syndicates in Myanmar. Many Thai women were conned into performing sex acts at the area’s casinos in the hopes of landing employment as waiters in different places.
Wan’s specific relationships with local officials on the Thai side of the border may be speculative and have never been fully looked into. However, it is clear to anybody visiting the Mae Sot region that supplies like as food, building materials, gaming equipment, and other items come from the Thai side. All recent cross-border buildings to the north and south of Myawaddy also depend on Thai energy. Thailand stopped supplying electricity to Shwe Kokko on June 5, but this simply resulted in a booming trade in generators in Mae Sot.

All of these events need to serve as a caution to Western peacemakers who have often praised numerous ceasefire agreements between specific ethnic armed groups (EAOs) and the Myanmar military, the most comprehensive of which being the so-called “Nationwide Ceasefire Agreement” signed in 2015. The border rebels will turn into border bandits if there is no political solution and just promises of commercial possibilities, which is all that the Myanmar military has so far given the EAOs. It is a prescription for catastrophe, as we have seen on the other side of the border in Mae Sot. And Saw Chit Thu, the leader of the BGF, is hardly the only example of a rebel commander who, after reaching a non-political ceasefire deal with the Myanmar military, converted into a competent private business. He hasn’t been able to bring his village prosperity or win any political concessions for the Karen, but in November 2022, the junta gave him the title of Thiri Pyanchi, one of the greatest distinctions in the nation.

Kachin State, where a former Communist Party of Burma unit in the eastern portion of the state made peace with the Myanmar military as early as 1989, is an example of a similar process. Initially named as the New Democratic Army-Kachin, it soon became involved in the trafficking of opium and heroin, illegal logging with significant wood sales to China, and even the manufacture of weapons that were sold on the black market. Other, smaller former EAOs have also started engaging in, to put it mildly, questionable business practices. Not only are there so-called BGFs among the Kachin and Karen, but there are also BGFs under the overall control of the Myanmar military in the Pa-O region, south of Taunggyi, the capital of Shan State, and the Kokang region, northeastern Shan State.

China’s involvement in this crisis is conflicted. Civilian legislators brought up the frauds and rackets in Shwe Kokko during public hearings in Naypyitaw when Myanmar still had democratically elected members of parliament. A tribunal was even established in June 2020 to look into the Yatai New City in Shwe Kokko, and progress there was halted—at least temporarily. After the coup in 2021, Yatai New City’s investors were permitted to restart their building work, which increased the region’s number of illegal companies.
In 2020, the Chinese Embassy in Yangon declared its “support” for the then-government’s efforts to look into Yatai New City, stating in a statement that China was “strengthening law enforcement and security with Myanmar” to crack down on “cross-border illegal and criminal activities such as illegal gambling and telecommunications fraud.” However, it was unclear whether Beijing had any plans to pursue the well-connected Wan on any of the numerous allegations made by the then-government.

Some of Wan’s former accomplices are now serving sentences for money laundering and racketeering at the Coloane jail in Macau. Wan could also need to avoid returning to his former haunt of Macau, where he is too well-known and anything he did would humiliate the regional SAR authorities. However, there are no issues with Cambodia or Myanmar, and China shares the same goals in those two countries. The Yatai New City project is being closely coordinated by Chinese state-owned businesses including the China Railway 20th Bureau, which has interests in building projects outside of China, and MCC International, another business engaged in infrastructure projects, according to the USIP research. Yatai New City and Guojing Consulting, a subsidiary of the Center for International Economic Exchanges, an official think tank, have entered a collaboration. All of those initiatives are integral parts of Beijing’s BRI and the China-Myanmar Economic Corridor.

The new face of Chinese investment in Myanmar is represented by Wan and the businesses he and his friends oversee, together with the criminalization of the nation under the ruling junta. The Huanya International City and the Saixigang Industrial Zone have also had a resurrection, with criminal networks controlling additional regions and a greater variety of businesses. Construction efforts at Shwe Kokko, or the Yatai additional City, have also restarted. In the long run, such trends plus the potential for more, perhaps catastrophic “ceasefire agreements” between certain EAOs and the military might destabilize Myanmar and leave only China with the opportunity to take the prizes. Furthermore, there appears to be little chance of Myanmar reclaiming some of the previous international attention given that the rest of the world is now obsessed with Russia’s invasion of Ukraine.