When Presidents Donald Trump and Xi Jinping meet on the side of the Asia-Pacific Economic Cooperation (APEC) forum in South Korea, there will be much on their agenda, including trade, Taiwan, and Ukraine. Also, according to U.S. Treasury Secretary Scott Bessent, fentanyl.
But paired with fentanyl, the Southeast Asian scam centers in Cambodia, Laos, and Myanmar should be prioritized, not just because some of them traffic in illicit precursor chemicals for fentanyl, but because all are engaged in trafficking of people and of scamming of billions from ordinary Chinese, Americans, and others around the globe. Working together will be far more effective than working separately.
Unlike fentanyl, where the majority of victims have been Americans, the scam centers so far mainly traffic Asians as slave labor and have targeted Asians for fraud, although they’re rapidly expanding their reach. They evolved from gambling casinos run by overseas Chinese and catering to Chinese since gambling was prohibited in mainland China. Some years ago, they turned toward the lucrative scamming business. As China has strengthened its protection from cyber fraud and closed operations immediately along its borders, they shifted farther south and toward new opportunities.
For manpower they deceptively advertise high-paying jobs on social media. Those attracted often find themselves deprived of passports, subject to extreme abuse and destined to a life of abetting some of the world’s most vicious criminals.
The industry received unwanted attention this year after a young Chinese actor disappeared in January from Bangkok while pursuing a seemingly lucrative gig. His girlfriend raised the alarm on Chinese social media, resulting in an enormous outcry and threatening to tank Chinese tourism to Thailand. Unlike most other cases, the Thai police quickly located and rescued the actor. Feeling the heat, a local Myanmar minority army “liberated” several thousand others held by the scammers.
After the publicity died away and the Thai had turned off cross-border power and internet services, the largest Myanmar scam center, Shwe Kokko, was soon reported back in business using generators and Starlink connections. A recent raid by the Myanmar authorities netted 30 some connectors (resulting in Starlinks disabling 2500 more) and the arrest of more than 2,000 criminals. Over 1,000 workers in the scam operations fled to Thailand, mostly Chinese, Indians, and Southeast Asians.
But strife-torn Myanmar is not the center of the industry. It lies in Cambodia where there is good internet conductivity and the industry enjoys high-level political connections and some protection through state-exercised sovereignty.
The torture and death of a young Korean whose body was discovered in Cambodia in August inflamed Korean public sentiment and brought the repatriation of dozens of Koreans. Many were willingly scamming and were charged, but others had been kidnapped and forced to work. Koreans, however, are only a small segment of the perhaps 200,000 people working in Cambodian scam centers. While dealing with the problem, Korea has tried gingerly not to damage its diplomatic relations with Cambodia.
Emboldened by their profits, the scammers have widened operations. International counter-measures have been fragmented, reactive, and episodic. Without a vigorous, sustained and truly international effort, this cruel industry will only continue to grow.
Because the original perpetrators as well as labor and targets have been Chinese, China has been most focused on counter-measures, but its efforts are mainly designed to protect its own citizens. In the process, they have tended to target lower-level criminals and encourage the scammers to look for less well-defended countries.
One is the United States, which has not paid much attention until very recently. A July report by the U.S. Congressional commission found U.S. defenses “fragmented and under-resourced.” But while most of the estimated $50-75 billion scam earnings still come from Asia, some $10 to 12.5 billion in 2024 may have come from the U.S. Unless addressed, this will inevitably become a much larger.
Thus, China and the U.S. have a responsibility to their own citizens and the world to work as co-leaders of a sustained campaign against scammers and illicit drug dealers, encompassing both the fraud and fentanyl issues. It will require strong national counter-scam institutions and the coordination within and across governments of intelligence, enforcement, and financial tracking and regulation. Just as in the case of money laundering, the campaign needs a laser focus on the big fish and their enablers, even if government officials, rather than small fry.
If China and U.S.-led at the highest levels, the international effort should be multinational with countries such as Thailand, Singapore, Australia, Canada and Mexico also deeply involved and committed. It makes sense to start this effort using APEC since so many APEC economies are relevant.
It will take a strong commitment of political will to be proactive and swing the momentum toward the side of closing down an industry that in only a few years has trafficked tens of thousands, is protected by lack of effective or complicit governance, and which is bilking millions around the world of tens of billions of hard-earned cash. Turning the momentum against the twin scourges of scams and illicit drugs should be worthy of a Nobel Prize.
By Charles E. Morrison
The author is a senior American political scientist and former president of the East-West Center, specializing in Asia-Pacific international relations and regional economic cooperation.
