Special Economic Zones in the China-Southeast Asia Borderlands

• In Event: Chinese Politics Mini-Conference: China’s Role in International Relations and Its Worldwide Impacts

Abstract

“Chinese President Xi Jinping has described the Belt and Road Initiative (BRI) as “a road of peace.” China’s proposition is that its investments in infrastructure projects overseas will promote development and peace and stability in developing countries. However, as China exports its technology, credit, and labor overseas, public security and social issues follow China’s economic footprint. By connecting regions, the BRI has made it easier for transnational Chinese criminal groups to transport drugs, launder money, and engage in human and wildlife trafficking. China’s image and reputation have suffered because of widely publicized illegal activities by these criminal networks that moved out of China in tandem with legitimate businesses.

This paper focuses on special economic zones (SEZs) run by these syndicates in the Mekong region. These SEZs have been described as “mini Chinese colonies” and enclaves of the “grey economy,” where casinos, online gambling, scams, human and wildlife trafficking and prostitution operate side by side. We investigate the puzzle of why Beijing intervenes in some host countries to put a stop to these activities but not others. The extent of intervention also varies with some measures that are more intrusive and that violate the sovereignty of host countries to a greater degree than others. What explains the variations in Chinese intervention? The widely held assumption is that reputational costs and domestic pressures to crack down on trafficking of Chinese citizens motivate Beijing to act. However, we found that these are insufficient for explaining Chinese intervention. Focusing on three SEZs situated in Myanmar, Cambodia, and Laos, respectively, we use process-tracing to identify new causal mechanisms to explain why China intervenes and the extent of Chinese intervention. We hypothesize that Beijing intervenes when (1) criminal activities in these SEZs destabilize Chinese borders and/or (2) China’s strategic and economic interests are negatively impacted. We also hypothesize that the extent of Chinese intervention is dependent on host countries’ capacity and willingness to cooperate.

Authors

• Selina Ho, National University of Singapore

• Xue Gong, Nanyang Technological University