SPECIAL REPORT
an excellent read; relates to new casinos in Burma as well
https://www.usip.org/sites/default/file ... rks-sr.pdf
The three megacities under development in Karen State are backed by complex Chinese busi-ness networks with ties to triads, convicted criminals, and involvement in illegal gambling oper-ations in Cambodia. They are referred to as “spinach” cities by Chinese involved in promoting illegal online gambling because the word spinach in Chinese (bocai, 菠菜) is a homophone for gambling (bocai, 博彩).4 Advertisements for employment or investment opportunities in these cities can be found on the Chinese website bcquan.com, or “spinach circle,” used by illegal Chinese gamers to share information on this vast illicit industry.5
Before examining the Karen State projects in greater detail, it is necessary to look at policy developments over the past decade elsewhere in Southeast Asia to see what drew these in-vestors to Myanmar.
We begin in Sihanoukville, Cambodia. Before 2017, Sihanoukville was a popular tourist des-tination for Western visitors to Cambodia. It was known for its quiet beaches and inexpensive cafes, but also demonstrated signs of vulnerability to criminal interests given the presence of Russian fugitives and several small casinos.9 While Cambodia has permitted the legal operation of these casinos since the mid-1990s, it was only in 2017 when Chinese real estate developers descended upon Sihanoukville to construct a precursor of the spinach cities. With their arriv-al, Sihanoukville’s real estate sector took off. According to one report, construction began in Sihanoukville in 2018 on more than twenty large-scale buildings, nearly all of them backed by Chinese investors.10 By late 2018, the Chinese population in Sihanoukville had grown exponen-tially, reaching roughly 30 percent of its residents, according to the governor.11
What brought so many Chinese to Sihanoukville, and why did the trend suddenly accelerate in late 2017? The answers lie in the Philippines in 2016, when Chinese and Filipino law enforce-ment began shutting down a series of illegal online casinos across the country and arresting thousands of the Chinese nationals involved in them.12 The crackdown led the Chinese oper-ators in early 2017 to flee en masse to Sihanoukville, where gambling was much more lightly regulated. According to World Gaming Information, a Chinese language information clearing-house for online gaming, between 2010 and 2019 overseas Chinese operating in the industry ping-ponged between the Philippines and Cambodia as they experienced intermittent periods of more or less relaxed casino regulation.13
From late 2017 until the middle of 2019, Cambodia essentially did nothing to regulate gambling in Sihanoukville and even licensed it, while China constantly pressured the Philippines to crack down on the business. Industry insiders say that many casinos host both in-person and online gambling, with the latter being the primary source of revenue. While both are labor intensive, online operations re-quire hundreds, sometimes thousands of workers to operate call centers to track down players. These workers are necessarily Chinese, as their client base is back in China. An online casino may employ anywhere from one hundred to four hundred dealers, security staff, technicians, and information technology support staff.
The Chinese gambling romance with Sihanoukville faded in 2019 after a series of violent crimes were committed by Chinese gangs arriving in the beachside town to provide security to the casinos and enforce payment from indebted players. Some players carried gambling debts from casinos themselves while others owed Chinese junket operators—middlemen who recruit players from China—generally paying for their trips and loaning them uS dollars for gambling. In May 2019, a disturbing video of a Chinese gang leader, flanked by shirtless and tattooed thugs, drew attention in both China and Cambodia, as he warned other groups to keep away and de-clared that his gang alone would “decide if Sihanoukville is stable.”
Cambodian Prime Minister HE issued a directive banning online gambling, noting that “some foreign criminals have taken refuge in the form of this gambling to cheat and extort money from victims, do-mestic and abroad, which affect the security, public order and social order.”15 HE was concerned in particular by the growing number of Chinese operating fraudulent online casinos, which featured rigged games to defraud customers, or what are sometimes called “pig slaughter-houses” in Chinese—fake casinos that entice customers to make large deposits into a gaming account and then shut down entirely, stealing the funds.16Given the depth of the Chinese penetration, the involvement of Chinese gangs, and the diffi-culty communicating with members of the Chinese community in Sihanoukville, the Cambodian police found the task of implementing HE’s order nearly impossible.
In the end, they had little choice but to rely on Chinese law enforcement to help restore order. In late 2018, almost a year before HE’s order, Cambodia and China reached a formal agreement to establish a law enforcement partnership. The two countries opened a joint op-erations center in Phnom Penh in late September 2019, with ninety Chinese police deployed to Cambodia to assist in its implementation. Sihanoukville became the test case for the joint enforcement program, and the day after its inauguration Chinese police arrested 116 Chinese criminals, who were immediately flown back to China for prosecution.17 In October, the center set up a hotline, staffed continuously, and implored the Chinese community to provide infor-mation about anyone operating online gambling or other illegal activities in Sihanoukville. The request for tips sparked further pandemonium in Sihanoukville’s Chinese community, causing many of those still involved in the industry to make a rapid exit. By one account, over ten thou-sand Chinese fled Sihanoukville following issuance of HE’s ban.18
According to records of the Myanmar Directorate of Investment and Company Administration, yatai IHG’s local subsidiary, the Myanmar yatai International Holding Group, was registered originally to a Cambodian national named Tang Kriang Kai, who is also listed on the Myanmar Given the depth of the Chinese penetration, the involvement of Chinese gangs, and the difficulty communicating with members of the Chinese community in Sihanoukville, the Cambodian police . . . had little choice but to rely on Chinese law enforcement to help restore order.
Cambodian citizenship records indicate that Tang obtained Cambodian citizenship in January 2017, changing his name from She Zhijiang to Tang Kriang Kai (although neither of those names match the names he uses in public—She Lunkai, Tang Lunkai, and Dylan She).21The reason for She Zhijiang’s secrecy is likely related to the illicit nature of his previous business operations. According to an ethnic Chinese Cambodian interviewed for this study, She Zhijiang began developing his business in Cambodia in 2015, initially in what is known as third-party pay—fronting funds for bets made in Cambodian casinos for Chinese who would otherwise have difficulty bringing money into the country.
She Zhijiang also has a stake in a no-torious coastal development project in Koh Kong, where several hundred acres of Cambodian beachfront property have been grabbed from local communities without adequate compensa-tion.22 Before Karen State, She Zhijiang reportedly spent over a decade in the Philippines and Cambodia “developing video games” and acquiring ownership of one of the largest spa and entertainment centers in Manila.23 She Zhijiang also established a blockchain research associa-tion in the Philippines, used to host events across the region.
https://www.usip.org/sites/default/file ... rks-sr.pdf
Chinese Spinach Cities; Sihanoukville
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Chinese Spinach Cities; Sihanoukville
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