Beijing’s Ties to Organized Crime Undermine Democracies and Threaten Regional Stability
A mob of pro-Beijing demonstrators attacked Hong Kong pro-democracy activists arriving at Taiwan’s Taoyuan International Airport on January 7, 2017. Taiwan’s police later identified members of the Four Seas Gang, the Bamboo Union organized crime syndicate and the Chinese Unification Promotion Party (CUPP) among the attackers. The mob also included Chang Wei, the son of former Bamboo Union leader and CUPP founder Chang An-lo (also known as White Wolf).
On January 15, 2020, former 14K triad leader Wan Kuok-koi (also known as Broken Tooth) was pictured with John Momis, then president of the Autonomous Region of Bougainville in Papua New Guinea (PNG). The month before, Bougainville held a nonbinding referendum in which over 90% voted for independence from PNG. Wan was visiting Bougainville in partnership with retired Chinese People’s Liberation Army (PLA) Senior Col. Li Yingming, an associate professor at the PLA’s National Defense University. The two men pitched development of a special economic zone and digital bank for Bougainville. Li operates a company in PNG advocating civil-military fusion along the People’s Republic of China’s (PRC’s) One Belt, One Road (OBOR), a network of trade routes and infrastructure projects extending globally.
These seemingly unrelated incidents in Bougainville and Taiwan highlight a trend of transnational organized crime groups acting in support of the Chinese Communist Party’s (CCP’s) national strategic interests. While there is no evidence that these activities are state directed, Beijing has shown willful blindness to the harm caused by criminal enterprises that claim to act in support of CCP objectives. Moreover, evidence going back nearly four decades indicates that the CCP has repeatedly sought to leverage transnational criminal organizations to achieve state priorities.
Transnational crime organizations with substantial ethnic Chinese populations are typically considered triads. Often the triads are based in China, Singapore or Taiwan. The groups weren’t always connected to crime. In 17th century China, the triad originated as a secret society that opposed the Qing dynasty. In the early 1900s, the group fractured and gradually some factions focused more on crime than politics, according to a report by the United States Congress. The 14K and Sun Yee On triads are among the largest engaged in organized crime.
THE CCP EMBRACES ORGANIZED CRIME
In Hong Kong, Macau and Taiwan, CCP officials have shown willingness to work directly with Chinese organized crime in support of Beijing’s objectives. In October 1984, then-CCP leader Deng Xiaoping remarked that the party was prepared to work with organized crime elements as long as they supported the country’s interests. He noted that Chinese triads contained “patriotic elements,” that “there are many good guys among them,” and that triads had provided protection for senior Chinese officials overseas.
In 1993, the chief of China’s Public Security Bureau, Tao Siju, expounded by stating, “As long as these people are patriotic, as long as they are concerned with Hong Kong’s prosperity and stability, we should unite with them.” Tao would go on to open the Top Ten bar and nightclub in Beijing with Charles Heung, a Hong Kong entertainment mogul identified as a leader of the Sun Yee On Triad.
Since Hong Kong’s 1997 handover to China, the city’s triads have taken increasingly aggressive action in support of China’s interests. Journalists critical of Beijing have been targeted by triad members, exemplified by the brutal machete attack against former Ming Pao newspaper editor Kevin Lao in February 2014. In July 2019, triad gangs attacked pro-democracy protesters at a train station. Beijing’s new hand-picked Hong Kong government sought to obfuscate the role of triads, falsely claimed the incident was a riot and arrested pro-democracy lawmakers.
Chang An-lo founded the CUPP in September 2005 in mainland China, where he lived in exile for nearly two decades to escape arrest. The gang leader has become a passionate advocate for Beijing, declaring, “China is my god.” Since Chang returned to Taiwan in 2013, the CUPP’s paramilitary force of criminals, drawn from the Bamboo Union and Four Seas Gang, has engaged in frequent, violent confrontations with Taiwan’s pro-independence groups. Chang has further claimed he was recruiting “red troops” in Taiwan to support reunification with China. Taiwan authorities alleged that Chang was acting on orders from Beijing to undermine Taiwan’s democracy and sovereignty.
CHINESE ORGANIZED CRIME AND CORRUPTION IN SOUTHEAST ASIA
In Southeast Asia, the PRC’s murky relationships with criminal organizations fuel corruption and regional instability. The PRC touts its leadership in the regional fight against illegal drugs. China’s Public Security Bureau has led patrols along the Mekong River, with occasional participation from Laos, Myanmar (Burma) and Thailand, beginning in December 2011. Upon closer examination, however, Beijing provides diplomatic and security support to the United Wa State Army (UWSA) in Myanmar. The UWSA, an armed ethnic group assessed to be one of the world’s largest heroin and methamphetamine trafficking organizations, is designated by the U.S. Treasury Department under the Foreign Narcotics Kingpin Designation Act.
Beijing has also turned a blind eye to the activities of Chinese national Zhao Wei, who operates the Golden Triangle special economic zone (SEZ) and the Kings Roman Casino in Laos. The SEZ has become a hub for the trafficking of wildlife, narcotics and humans in the region. In January 2018, the U.S. Treasury Department sanctioned Zhao, his companies and associates as a transnational criminal organization. Journalists visiting the Golden Triangle SEZ have noted that Chinese state-owned companies, such as China Communications Construction Co., have played a key role in building facilities for Zhao’s operations.
Farther south, in Myanmar’s Karen State, Chinese companies are building SEZs copying Zhao’s casino-centric model. The Yatai New City project, also known as Shwe Kokko, is led by a Chinese national claiming Cambodian citizenship, and its parent company shares its name with a Chinese state-owned enterprise. The project’s local partner is Col. Saw Chit Thu, leader of the Karen Border Guard Force and the Democratic Karen Buddhist Army, an ethnic armed group linked to narcotics, arms and human trafficking.
While Beijing denies any state role in Yatai New City, the China Federation of Overseas Chinese Entrepreneurs publicly endorsed the project in a ceremony held in Yangon, Myanmar’s commercial capital. The federation is approved by China’s State Council and registered with the Chinese Ministry of Civil Affairs. It is administered by the All-China Federation of Returned Overseas Chinese, a component of China’s United Front Work Department. Another nearby development project in Karen State is Saixigang, a casino project led by Wan.
CRIMINAL NETWORKS ESTABLISHING BEACHHEADS FOR BEIJING’S STRATEGIC INTERESTS
Wan’s activities illustrate how criminal actors are pursuing Beijing’s strategic interests along OBOR. He has enjoyed unfettered access to senior foreign political leaders and the support of well-connected Chinese security officials throughout the Indo-Pacific region. Some of his most ambitious projects are in countries that still recognize Taiwan, such as Palau, or in autonomous and breakaway regions such as Bougainville and Karen State, where overt Chinese state involvement could be perceived as interference in the host nation’s domestic affairs.
Wan, a member of the Chinese People’s Political Consultative Conference (CPPCC), has pursued a range of projects throughout the Indo-Pacific aligned with China’s strategic interests. In 2018, he established the World Hongmen History and Culture Association office in Phnom Penh, Cambodia, and launched Hongmen-related private security and cryptocurrency projects in Cambodia, Malaysia, the Philippines and Thailand.
From 2018 to 2019, Wan sought multiple casino and gaming resort-related business developments in the Pacific island nation of Palau. He also tried to establish a Hongmen branch there and advocated for Palau’s switch of recognition from Taiwan to the PRC.
Wan has advertised that his Hongmen private security company can contract Chinese special forces veterans in support of OBOR projects. In October 2019, Wan was photographed with Chinese People’s Armed Police Snow Leopard Commando Capt. Shi Weidang in Kuala Lumpur, Malaysia. He has also been pictured visiting members of the Cambodian prime minister’s bodyguard unit and the Cambodian military. In March 2020, the website African Intelligence noted that Wan was “starting to make his presence felt in Uganda as a champion” of OBOR. Hongmen security and construction companies have been registered in Uganda, indicating the scope of Wan’s global ambitions.
Wan’s partner in Bougainville, the retired PLA senior colonel Li, also is a former United Nations military observer in the Democratic Republic of the Congo. He has been profiled by China’s People’s Daily newspaper as a proponent of expanding the PLA’s international footprint and perspective. Wan and Li pledged to finance construction of an airport, port facilities and urban infrastructure in Bougainville. These activities align with the PRC’s goals of enhancing its forward posture in the South Pacific.
In December 2020, the U.S. Treasury Department sanctioned Wan and his companies for international corruption under the Global Magnitsky Human Rights Accountability Act. In an interview published December 24, 2020, Wan responded by declaring his intent to unify ethnic Chinese organized crime syndicates around the world in support of Beijing and against the U.S., to include 14K, the Sun Yee On and Wo Shing Wo triads; the Bamboo Union and Four Seas Gang in Taiwan; and the U.S.-based Wah Ching and Fujian gangs.
In February 2021, Malaysia announced it had indicted Wan on charges related to securities fraud during his time as chairman of the Malaysian technology company Inix from August to December 2020. In late March 2021, Malaysian police took down a massive criminal network linked to Wan’s associate Nicky Liow, who had also been appointed a vice president of Wan’s Hongmen organization. Malaysia cited Liow’s connections to Wan and the U.S. Treasury Department sanctions as catalysts for its investigation.
Despite the U.S. Treasury sanctions against Wan, his public admission of continued ties to transnational organized crime and his indictment on criminal charges by Malaysian authorities, the Chinese government-sponsored China Association for Promoting International Economic and Technical Cooperation (CAPC) honored Wan with a ceremonial plaque and the title “Chief Representative of Hongmen Patriots” at a March 27, 2021, ceremony in Beijing. CAPC falls under the China Association for Science and Technology, led by CPPCC Vice Chair Wan Gang.
SILENCE IS CONSENT
The CCP has been silent regarding the actions of ethnic-Chinese criminal organizations that purport to represent Beijing’s strategic interest. The most Beijing could muster in response to the U.S. Treasury Department action against Wan was a terse denial of reports that he was a member of the CPPCC, a fact widely reported in regional and international media. China has taken no action to constrain drug kingpin Zhao, who is now expanding his investment with a U.S. $50 million port facility in Ban Mom, Laos. Beijing also maintains its support for the UWSA and its notorious drug factories, even amid the deteriorating humanitarian and security situation in Myanmar.
To demonstrate respect for international norms and the rule of law, Beijing must disavow the criminal networks acting in its name and work with international partners to clamp down on the flow of corruption along OBOR. In the absence of any serious commitment to reform, it must be assumed that the PRC is calculating that the benefits of supporting gangsterism, at home and abroad, outweigh the risks to its international reputation.