Chinese Hand in Myanmar’s Cyber Scam Centres: Abuse of Cheap Water and Electricity
~ Linn Maung ~
Myanmar has become ground zero for a disturbing intersection of criminal exploitation and resource abuse, where Chinese-operated cyber scam centres systematically exploit the country’s governance collapse while consuming massive quantities of scarce water and electricity resources. This exploitation represents a calculated strategy by Chinese actors who simultaneously condemn these operations publicly while indirectly benefiting from Myanmar’s chaotic state through resource extraction and infrastructure control.
The Scale of Chinese Cyber Scam Operations
The magnitude of Chinese involvement in Myanmar’s cyber fraud industry has reached unprecedented levels. Liu Zongyi, Assistant Minister in China’s Ministry of Public Security, commented in February 2025 that 36 Chinese gangs operate scam centres utilizing approximately 100,000 people in forced labour conditions. These operations have transformed Myanmar into the global epicentre of cyberfraud, with the industry now posing an unprecedented threat to international cybersecurity while relying heavily on human trafficking and forced labour.
The scam centres primarily concentrate along the Thailand-Myanmar border, particularly in areas like Myawaddy, KK Park, and Shwe Kokko. These facilities have expanded dramatically since 2021, growing from 11 dedicated compounds to 30, constructed at an average rate of 13.5 acres per month over the past four years. The operations generate billions of dollars annually through sophisticated fraud schemes targeting victims globally, including Americans who lost $16.6 billion to these scams in 2024 alone.
Resource Exploitation Amid Poverty
Myanmar’s dire economic situation creates the perfect conditions for Chinese exploitation. Her national poverty rate has increased to 32% in 2023-24, with approximately 7 million more people living in poverty compared to the pre-COVID period. Some estimates suggest the rate has reached 49.7% by the end of 2023, with an additional 25% barely above the poverty line. With more than 32 percent of the population living in poverty and 80 percent of rural areas lacking access to grid electricity, the country struggles with one of the lowest electrification rates in Asia. Yet these same scarce resources are being diverted to power energy-intensive cyber scam operations and Chinese mining activities.
The country’s peak electricity load was 3,997 megawatts in May 2021, with power generation dominated by gas (57 percent) and hydroelectric power (39 percent). Myanmar’s electricity generation has dropped to just 2,200 MW daily from the usual 4,000 MW as of January 2025. Only 48% of the population had access to electricity in late 2024, representing one of the lowest rates in Asia. The power crisis has become so severe that in major cities like Yangon, electricity is limited to 4-hour blocks followed by 8-hour shutdowns. This energy crisis has devastated daily life, with healthcare workers unable to refrigerate essential medications and industries facing crippling power cuts.
Chinese Control Over Myanmar’s Energy Infrastructure
China’s exploitation extends far beyond cyber scam centres to encompass systematic control over Myanmar’s hydroelectric infrastructure. Chinese-backed hydropower projects, such as the TarPein hydro plant and Ruli hydro-power plant, exemplify this resource colonization. Despite being joint ventures supposedly benefiting Myanmar, these facilities primarily serve Chinese interests.
The TarPein plant, a 240-megawatt facility, was designed to provide 8 percent of its power to Myanmar’s population, but no distribution infrastructure was ever installed. Instead, China acquired this electricity at artificially low prices—1 unit for 18 kyats—while Myanmar’s government remains responsible for debt payments and compensation for war damage. Similarly, the Ruli hydropower plant directly supports Chinese nickel mining operations, with management entirely under Chinese company control.
This pattern reveals a calculated strategy where China leverages Myanmar’s political instability to secure energy resources at below-market rates while local populations remain without electricity. Myanmar citizens face the cruel irony of living without power despite numerous dams being built on their territory, with most generated electricity transmitted directly to China.
Environmental and Water Resource Devastation
The environmental toll of Chinese operations in Myanmar extends to catastrophic water resource abuse. Myanmar produced 31,000 metric tons of rare earths in 2024, making it the world’s fourth-largest producer. Rare earth exports from Myanmar to China reached $4.2 billion in the eight years from 2017-2024, with 84% of all extracted elements ending up exclusively at Chinese processors. Rare earth mining operations, which have surged by 70 percent in Chinese imports from Myanmar during the first half of 2023, consume enormous quantities of water through toxic leaching processes. These operations require large amounts of water from community sources, leaving local residents suffering from water shortages and reduced crop yields.
In Kachin State, pristine forests have been transformed into lunar landscapes pockmarked with mining pits and toxic processing facilities. The environmental devastation includes contaminated water sources and agricultural land, with local communities reporting severe health impacts including skin diseases, respiratory problems, and internal organ damage. The leaching ponds used in rare earth extraction can leak contaminated water into groundwater systems if not properly sealed, creating long-term environmental disasters.
The Junta-China Resource Partnership
China’s support for Myanmar’s military junta creates a symbiotic relationship that enables continued resource exploitation. Despite international sanctions and diplomatic isolation following the 2021 coup, China has provided Myanmar’s military with an estimated $267 million in weaponry, trailing only Russia ($406 million). Chinese Foreign Minister Wang Yi recently pledged $3 billion in assistance to the junta, including funds for elections that would legitimize military rule.
This support serves multiple Chinese interests: maintaining access to Myanmar’s natural resources, protecting Belt and Road Initiative investments, and preventing the collapse of a government that facilitates Chinese resource extraction. The military junta, desperate for revenue and international legitimacy, has outsourced territorial control to armed groups that profit from scam operations while providing security for Chinese mining and hydropower projects.
The Contradiction of Anti-Scam Operations
Perhaps most cynically, China conducts highly publicized anti-scam operations while simultaneously supporting the very system that enables these activities. China has repatriated over 53,000 Chinese nationals from Myanmar’s scam centres since October 2023, with dramatic media coverage showcasing law enforcement cooperation. These operations serve dual purposes: responding to domestic Chinese pressure about trafficking of Chinese citizens and providing leverage over Thailand and Myanmar for broader geopolitical objectives.
However, these crackdowns primarily target Chinese victims while leaving the underlying infrastructure intact. Up to 100,000 people remain working in scam centres along the Thai-Myanmar border as of March 2025, despite ongoing crackdowns. Phone tracking data analysis revealed frequent movements between Myawaddy scam centres and government buildings in Naypyidaw, suggesting continued direct junta involvement. The scam operations simply relocate to areas beyond Chinese reach or wait for attention to subside before resuming. Meanwhile, China continues providing economic and military support to the junta that enables these operations to flourish.
Exploiting Governance Collapse
China’s strategy deliberately exploits Myanmar’s governance breakdown to maximize resource extraction with minimal oversight. The country’s civil war has created a patchwork of loosely governed territories ripe for exploitation by unregulated Chinese companies. Operating through complex webs of local proxies and shadowy partnerships, Chinese firms have expanded operations by over 40 percent across resource-rich regions.
This approach allows China to maintain plausible deniability while systematically extracting Myanmar’s natural wealth. Chinese companies bribe local armed groups, including providing 50 crores MMK (approximately $24 million) to protect mining sites in Sagaing Region. They also collaborate with junta-linked cronies and Border Guard Forces to provide security and logistics for extraction operations.
Resource Colonization Through Crisis
Myanmar’s rare earth resources exemplify China’s opportunistic approach to resource colonization. The country possesses 9 percent of global rare earth mineral reserves, yet China has secured 84 percent of Myanmar’s rare earth exports at prices up to seven times below market rates. These critical minerals, essential for electric vehicles and renewable energy technology, are exported unprocessed to China and refined domestically, allowing China to avoid environmental backlash while controlling global supply chains.
The scale of exploitation has reached unprecedented levels, with Myanmar now supplying approximately 40 percent of crucial heavy rare earth elements like dysprosium, yttrium, and terbium to China. This systematic extraction occurs while Myanmar’s population struggles with basic energy and water access, creating a stark contrast between resource abundance and human deprivation.
The Human Cost of Resource Abuse
The intersection of cyber scam operations and resource exploitation creates compounding human suffering. Scam centres consume significant electricity to power servers, air conditioning, and security systems, further straining Myanmar’s already inadequate power grid. Meanwhile, mining operations contaminate water sources that communities desperately need for drinking and agriculture.
Victims trapped in scam centres endure horrific conditions, working 17 hours daily with minimal rest while being subjected to electric shock torture if they fail to meet quotas. These operations consume resources that could alleviate Myanmar’s energy poverty while generating profits that flow primarily to Chinese criminal networks and their local collaborators. A Chinese film made on this issue became a blockbuster in China and prompted scores of Chinese tourists to cancel their travel plans to Myanmar, Thailand and neighboring countries.
Strategic Implications and International Response
China’s dual approach of conducting anti-scam operations while supporting the enabling environment reveals a sophisticated strategy of maintaining control while managing international criticism. This approach allows Beijing to demonstrate concern about transnational crime to domestic audiences while preserving the political conditions that facilitate broader resource exploitation.
The international community faces the challenge of addressing this multifaceted exploitation without further destabilizing Myanmar or pushing the country deeper into Chinese orbit. However, the cost of inaction remains enormous, as it allows China to further consolidate control over critical resources while perpetuating human suffering through both criminal operations and environmental destruction.
Conclusion
China’s hand in Myanmar’s cyber scam centres represents just one facet of a broader strategy of exploiting governance collapse for resource extraction. By simultaneously conducting publicized anti-scam operations while supporting the military junta that enables these activities, China maintains the facade of responsible international behaviour while systematically draining Myanmar’s natural wealth.
The abuse of Myanmar’s scarce water and electricity resources by Chinese-operated facilities occurs against the backdrop of widespread poverty and energy insecurity affecting millions of Myanmar citizens. This exploitation exemplifies how powerful nations can leverage weaker states’ internal conflicts to secure strategic advantages while deflecting international criticism through selective enforcement actions.
The situation demands coordinated international action that addresses both the immediate humanitarian crisis in scam centres and the underlying patterns of resource exploitation that perpetuate Myanmar’s suffering. Without such intervention, China’s model of crisis capitalism—profiting from instability while publicly supporting stabilization efforts—risks becoming a template for resource extraction across the developing world.
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