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Entangled in criminal underworld, China plays 'powerful' role in a divided Myanmar

A Chinese army drill with Myanmar
By John P. Ruehl* 
Myanmar’s stability has eroded significantly since the 2021 military coup. But the coordinated attack by multiple separatist and pro-democracy groups in October and November 2023 has seen military outposts, villages, border crossings, and other infrastructure overrun. While the Tatmadaw, Myanmar’s military, clings to control in central and coastal regions populated by the country’s ethnic majority, much of the country’s border areas are increasingly slipping into anti-government control.
This current turbulence is not an aberration but deeply rooted in Myanmar’s history. Since gaining independence from British rule in 1948, the country has grappled with what is commonly described as the world’s longest-running civil war. Initial experiments with democracy witnessed limited clashes between Myanmar’s central government and Ethnic Armed Organizations (EAOs.) Following a military coup in 1962 that established the junta, more EAOs emerged to challenge government power.
Infighting and splintering among EAOs, coupled with their growing antagonism toward the Burma Communist Party (BCP), itself waging a war on the central government, allowed the junta to implement fragile ceasefires in exchange for limited autonomy. By the end of the Cold War, democratic protests in 1988, the collapse of the BCP in 1989, and free elections in 1990 all suggested Myanmar was cautiously embracing a peaceful future.
Despite losing the elections in 1990, however, the junta did not relinquish power, drawing international condemnation. EAOs and other groups like the Myanmar National Democratic Alliance Army (MNDAA), which split from the BCP, then continued their struggle for two decades until the junta ceded some powers to a civilian administration in 2011. Elections in 2015 and 2020 saw landslide victories for the National League for Democracy (NLD), as well as some progress toward reconciliation.
But in 2021, the Tatmadaw reestablished the junta and plunged the country back into destabilization, culminating in the 2023 autumn offensive by anti-junta forces. In addition to EOAs and a reorganized BCP, the junta has also been forced to contend with People’s Defense Forces (PDFs), loose armed organizations backed by the National Unity Government (NUG), set up by lawmakers and politicians in the aftermath of the coup. Additionally, the role of the Burman ethnic majority and grassroots civil defense forces in opposing the junta has also complicated its response to unrest.
The junta has proven adept at managing its restive elements before, and can also rely on its Border Guard Forces (BGFs) and other pro-government militia groups. But the broad swathes of Myanmar’s society fighting against it have made the junta’s traditional policy of divide and rule far less effective. Myanmar’s Acting President Myint Swe has said the country could “split into various parts”, prompting Myanmar military officials to retreat to the capital, Naypyidaw, a planned city completed in 2012 that effectively serves as a fortress located near the most restive regions.
China’s role in Myanmar has undergone significant shifts since the latter’s independence. Despite 
Chinese support for the BCP and other communist groups, Myanmar grew closer to China after its isolation from the West in the 1990s. Beijing supported the junta to stabilize Myanmar and prevent adversaries from establishing a foothold on China’s southern border. Other interests included maintaining access to Myanmar’s raw materials and natural resources, as well as infrastructure development to turn Myanmar into a strategic gateway to the Bay of Bengal through the China-Myanmar Economic Corridor (CMEC), part of China’s Belt and Road Initiative (BRI).
China maintained ties to the junta, democracy advocates, and ethnic groups from 2011 to 2021. However, the 2021 coup disrupted development projects and led to attacks on Chinese-run facilities by rebel groups, and the junta’s inability to protect infrastructure exacerbated historical tension between it and Beijing. Four Chinese civilians were killed in 2015 after a Myanmar military airstrike hit across the border into Yunnan, while the junta burned down a Chinese-owned factory and killed Chinese and Myanmar civilians in 2021.
China’s ongoing support to some militia groups, such as the United Wa State Army (UWSA) and MNDAA, provides Beijing leverage over the junta and a say in the ceasefire processes. Chinese firms also often work with armed groups in “special economic zones” near the border, and some of the anti-junta groups regularly cross the border to China to escape the junta and its proxy forces. Beijing’s tacit approval of their activities may also be partially fueled by wariness that rebel groups were becoming closer to the U.S. prior to the new offensive.
Beijing has nonetheless attempted to sustain a balancing act, arresting a UWSA deputy military chief in October 2023 and initially ignoring calls for assistance from the rebels after the launch of their offensive. But following the steady string of defeats suffered by the junta, China has since altered its outlook. China’s affiliates now form some of the most powerful groups operating in Myanmar, and China’s foreign ministry has called for a ceasefire.
Myanmar’s porous borders have not only allowed armed groups to flourish but also facilitated the expansion of organized crime networks. Increased cooperation between militant and criminal groups in recent decades, known as the terror-crime nexus, has elevated the power of these groups worldwide.
American efforts to counter communism inadvertently helped develop drug networks in Myanmar during the early Cold War, while transnational organized crime in Southeast Asia burgeoned in the 21st Century. The COVID-19 pandemic further established Myanmar as a hub of criminal activity, expanding the funding networks available to the country’s armed groups. Both local and international criminal networks operate in Myanmar’s special economic zones, engaging in human and wildlife trafficking, slavery, cybercrimes, money laundering, communication fraud, illegal casinos, and online gambling centers.
The relationships between these entities and governments are intricate, with shifting alliances commonplace. Beijing and transnational Chinese gangs play central roles in Myanmar’s heightened criminal activity. The junta has also had close ties to criminal networks for decades, and since the 2021 coup has become increasingly reliant on criminal activity to finance itself and offset international isolation.
China, while entangled in Myanmar’s criminal underworld, has grown steadily more concerned with rising illicit activity on its border with Myanmar and the willing and unwilling participation of Chinese citizens. China’s signals to the junta to address the forced-labor networks since May 2023 went unheeded, leading to China issuing arrest warrants for junta allies and the UWSA to raid online scam compounds and trafficked labor centers in border regions.
Amidst growing dependence on a Chinese leadership willing to support multiple sides, the junta’s outlook appears bleak
However, the resilience of regional criminal groups became evident after the NLD failed to disrupt their activities during the decade of partial democratic rule from 2011 to 2021, and they have only grown financially stronger since. And despite their interweaving with regional elites, criminal networks and their militant partners have developed newfound agency and an ability to act independently from governments since the 2021 coup.
Additionally, while the junta styles its current campaign as a counterinsurgency, Myanmar’s armed groups possess significant military capabilities. Minority groups such as those belonging to the Karen ethnic group were prominent in Myanmar’s armed forces during the British colonial administration, gaining valuable experience. As in Ethiopia, certain ethnic groups have developed and maintained well-equipped forces capable of both insurgency and conventional warfare.
Like other anti-government forces around the world, Myanmar rebel groups have also embraced new technologies and strategies in recent years. This includes crowdfunding initiatives, which have expanded significantly since 2021, to offset the junta’s control over the central bank and other national economic levers. Large-scale application of drone warfare has also made a marked difference on the battlefield, even before the current offensive by the rebels.
Myanmar’s militant groups have also worked with European criminal groups to obtain weapons, and groups like the UWSA have proven capable of manufacturing weapons since 2008. The use of 3D-printed guns by Myanmar rebel groups, just ten years after the first 3D-printed gun was produced, also marks a distinctive feature of the current conflict. The NUG has meanwhile been busily setting up local civic administration and public services and People’s Administrative Teams (PATs) in PDF-controlled or contested areas, indicative of their state-building capabilities.
Hindered by international isolation, increasingly powerful rebel groups, and a growing dependence on a Chinese leadership willing to support multiple sides, the junta’s outlook appears bleak. But it does maintain some other allies abroad. Russia grew closer to the junta throughout the 2010s and despite being tied down in Ukraine, Moscow has offered more support for Myanmar since the coup, including the first ever Russia-Myanmar joint naval exercise in November 2023. Bordering states Laos and Thailand also maintain friendly ties to the junta, and Laos, holding the chairmanship of ASEAN since September 2023, has shielded Myanmar from greater institutional isolation.
Myanmar’s other neighbors, India and Bangladesh, are also wary of additional instability and the potential emergence of a failed state on their borders. India has already seen tens of thousands of refugees (as well as soldiers from the junta) cross the border since 2021, while Bangladesh has seen close to one million Rohingya refugees enter the country since 2016, and India has recently shown it is still willing to engage with the junta despite its vulnerability.
Efforts to further unite anti-government forces meanwhile face obstacles due to differences in strategies, objectives, and allegiances. Several organizations have been set up to encourage greater coordination, but infighting is still common. Some EAOs, like the Restoration Council of Shan State (RCSS), are still open to adhering to the Nationwide Ceasefire Agreement (NCA) while others consider a federal system a viable alternative to complete independence. Perceived indifference to the Rohingya crisis in 2017 on behalf of the democratic government at the time also reveals the persistent ethnic tensions among Myanmar’s population despite alternative leadership.
Convincing criminal and militant groups to give up their lucrative illicit networks, as well as untangling their links to the junta-dominated economy, will also prove challenging. And with the U.S. diplomatically tied down in Ukraine and Israel and ASEAN’s divided approach to the crisis, China enjoys relative freedom to manipulate the situation on its border. Yet despite positive relations across Myanmar’s political spectrum, Beijing’s reluctance to intervene more directly only amplifies the persistent uncertainty surrounding Myanmar’s future.
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*Australian-American journalist living in Washington, DC, world affairs correspondent for the Independent Media Institute. He is a contributing editor to Strategic Policy and a contributor to several other foreign affairs publications. His book, Budget Superpower: How Russia Challenges the West With an Economy Smaller Than Texas’, was published in December 2022. Source: Globetrotter

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