Greetings to all viewers, welcome to “Observations by Qin Peng”. Today is June 20th in the Eastern US time, and June 21st in Beijing, Hong Kong, and Taipei time.
Today’s focus: A major investigation by US media reveals that four prominent families in Myanmar involved in online scams targeting Chinese individuals are, in fact, monstrous creations nurtured by the Chinese Communist Party.
The Chinese government’s aggressive tax investigation tactics have escalated, with the establishment of various Joint Operation Centers for Tax and Police in response. Legal scholars in China publicly criticize the authorities’ actions as unconstitutional.
At a critical moment, Xi Jinping attends a meeting of the Central Military Commission, warning the military of the “complex challenges faced politically.”
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Over the past three years, news from northern Myanmar has frequently surfaced on the internet and Chinese state media. Reports vary from exposing the pork trade secrets, to organ trafficking at KK park, clashes between the Myanmar United Army and government forces, and the extradition of numerous fraudsters back to China. These events have been shocking and shrouded in mystery, leaving many wondering about the truth behind them.
On Wednesday, the Washington Post published a groundbreaking investigation revealing that the four major criminal families in Myanmar targeted by the Chinese authorities in the past year were previously shielded by Chinese officials and the Myanmar military government.
The article details the downfall of Wei Qingtao, a descendant of the Wei family involved in human trafficking, slavery, money laundering, and global telecom fraud. A year ago, he lived a lavish life driving Bentleys and Lamborghinis, smoking rare cigars, and showering crowds with stacks of yuan bills at nightclubs in the Kokang region.
However, by November 2023, Wei Qingtao’s luxurious life came to an abrupt end when he found himself in a Chinese detention center, reciting his confession. Weeks later, his uncle was also handcuffed and escorted onto a flight bound for China, accompanied by dozens of police officers.
Chinese state media extensively covered the arrests of high-ranking members of the four families, with the People’s Daily stating that “no matter how big you become, you cannot escape severe legal punishment.”
However, the investigation by the Washington Post uncovered evidence that these families, mainly the Wei, Bai, and Liu families, had close ties with Chinese officials, particularly those from Yunnan province, over the past decade and received support from Beijing and the Myanmar military government.
Evidence of the deep collaboration between these families and Chinese officials has been deleted from Chinese websites, but the Washington Post archived and verified some of this evidence. Statements, press releases, and photos from official websites of the Kokang authorities, Myanmar, and China show collaboration on multiple multi-billion dollar economic projects. More than 20 former employees were interviewed about the operation of over 300 fraud rings in the region, estimated by the UN and Interpol to involve tens of thousands of individuals engaging in fraud activities, with the industry scale reaching up to $3 trillion.
The majority of victims were Chinese citizens or of Chinese descent, bought and traded like commodities. Those who didn’t meet financial targets or tried to escape faced beatings, torture, or even death.
The Washington Post also reviewed court records in China, finding over 1,100 criminal cases related to Kokang in the past decade, with some involving these prominent families. However, the Chinese authorities mostly targeted low-level individuals, while the heads of these families continued to cooperate with Chinese officials.
For example, in May 2023, the Liu family participated as VIPs at a trade expo on the China-Myanmar border in the capital of Myanmar. Liu’s company booth was located next to Huawei and China Telecom’s booth. Chinese Ambassador to Myanmar, officials from Yunnan’s Lincang city, and other Chinese officials attended the expo.
The Chinese Communist Party nurtured these families for multiple purposes: to ensure border security in Yunnan, expand border trade and investment, and further strengthen these families through Xi Jinping’s Belt and Road Initiative. Additionally, the CCP sought increased control over Myanmar, making these criminal families ideal partners.
Kokang has long been synonymous with evil, from heroin and methamphetamine production to gambling dens, all thriving under the rule of warlord Peng Jiasheng and his Myanmar National Democratic Alliance. After the Myanmar military defeated the United Army in 2009, Peng designated commander Min Aung Hlaing to control Kokang. Meanwhile, the Bai, Wei, and Liu families gained control over both above-ground and underground economies in Kokang.
In 2021, Min Aung Hlaing staged a coup, overthrowing the democratic government and further solidifying these families’ positions as political and economic power brokers.
However, conflicts between the CCP and these families have intensified. According to the Washington Post investigation and internal sources I have, there are three main reasons: firstly, after these families and Min Aung Hlaing’s administration grew in power, they started to defy Chinese control, prompting the former Kokang United Army, hiding in the jungle, to strike back (with alleged support from the CCP). Secondly, the fraud rings and illegal human trafficking in Myanmar evoked anger both domestically and globally, forcing the CCP to take action.
The third reason is that the CCP is seeking more extensive control in Myanmar, especially for access to the Indian Ocean, with Jade Port as a prime choice. From January 10th to 11th, 2024, under the CCP’s strategy of coercion and compromise, the Myanmar government was pressured to negotiate with the United Army in Yunnan’s Kunming, leading to a formal ceasefire agreement. The military government had to cede a 99-year lease on Jade Port.
The Washington Post’s investigation also revealed that businesses under these families’ control are still operational, and most cyber fraud syndicates, largely controlled by ethnic Chinese, have expanded to other parts of the world. Particularly in Cambodia and Laos, as far as Dubai in the UAE, South Africa, and Georgia.
Jason Tower, head of the Myanmar Project at the US Institute of Peace, stated, “The Kokang families are the engine of Sino-Myanmar economic relations. Their economic influence stems not only from [illegal activities] but also from their extensive network with economic and political elites across China.” He indicated that the CCP had helped create a “Frankenstein it can no longer control,” a group of monsters.
After discussing Myanmar, let’s delve into a group of monsters nurtured by the CCP within China itself: government abuses of power.
Recently, several regions in China have established “Joint Operation Centers for Tax and Police,” ushering in an era of collecting taxes at gunpoint.
Netizens have revealed that the Hangzhou Joint Operation Center for Tax and Police is at the forefront nationwide, with friends from various electronic brands receiving notices to pay back taxes ranging from 100,000 to 120 million RMB, leading many to contemplate bankruptcy preparations, saying, “Thank you!”
On Twitter, a user mentioned, “Two LPs I know have received notices for back taxes. They have lost at least 50% of their investments (though it’s not reflected on the books since they haven’t exited yet). After paying 20% in personal income tax, now they have to pay back taxes, wiping out all their gains. This wave is set to wipe out VC/PE funds entirely.”
It’s clear to discern what this implies. The imminent closure of numerous enterprises and the impending surge of job losses, including many like Li Zicheng and Zhang Xianzhong.
As a result, Hu Xijin, former editor of the Global Times, expressed concern on June 18th, suggesting that the term “Joint Operation Center for Tax and Police” is misleading to the public and detrimental to boosting confidence in the private economy. He recommended refraining from using this terminology and replacing it with more legally-oriented language.
It’s evident that not everyone shares Hu’s courtesy. On June 19th, Wang Cailiang, a part-time professor at the Law School of Beihang University and a lawyer at Cai Liang Law Firm, criticized the establishment of Joint Operation Centers for Tax and Police in various regions. He stated that Xi Jinping says the people are the foundation of the country, yet taxpayers have become targets of military operations. Law enforcement officers should understand that it’s the people who support them, not the enemies. This move is suspected to be unconstitutional and should be abolished and held accountable. The video stirred discussion but was swiftly deleted from the entire internet.
Many are wondering whether the escalation of tax inspections by various regions was at the behest of top authorities. It seems likely because the State Administration of Taxation officials denied plans for a nationwide tax inspection or a retroactive review for the past 30 years, but there’s an underlying insinuation. Additionally, it’s well-known that under Xi Jinping’s confidant, Wang Xiaohong’s control, the Ministry of Public Security has swiftly revoked any improper actions. Yet now, Joint Operation Centers for Tax and Police are cropping up nationwide.
Essentially, this signals that the Central Committee of the Chinese Communist Party holds the same stance on “stability maintenance,” allowing local authorities to escalate crackdowns however they see fit, except in the case of major problems. Their adversarial attitude towards the people is alarmingly clear!
Therefore, it is crucial to brace for the upcoming challenges.
Recent reports from Xinhua state that Xi Jinping attended a political work meeting of the Central Military Commission in Yan’an, Shaanxi, delivering an important speech emphasizing “the absolute leadership of the party over the military” and stressing, “Currently, world affairs, national conditions, party conditions, and military conditions are undergoing complex and profound changes. Our military faces complex political challenges.” He also specified that “corrupt elements must not find a haven within the military.”
Upon meticulous scrutiny, these statements raise questions. If there were no corruption, why would these generals risk their lives for him? Recently, a report from the US Congress revealed that Xi Jinping’s family had accumulated over $700 million as early as 2012. How many senior CCP officials are not filthy rich?
Xi Jinping’s remark, “Our military faces complex political challenges,” also warrants contemplation. What is the current global situation? The momentum of the global coalition against the CCP is building. Putin’s apparent friendship with the CCP, alongside strengthened alliances with North Korea, contrasts with global challenges. Notably, China’s economic and social crises are worsening, leading to wealthy individuals accelerating their exodus, triggering discontent across various regions. Party-wise, as local governments face financial difficulties, they are losing confidence in Beijing and engaging in subtle resistance.
So, what profound and complex changes are occurring within the military? Since Xi Jinping took office, anti-corruption efforts in the military have never subsided. In just a short period, at least nine PLA generals and four senior officials from defense industry SOEs have been removed from national legislative positions. Additionally, the Third Plenum set for July is expected to officially remove central committee positions held by former Foreign Minister Qin Gang and former Defense Minister Li Shangfu—both handpicked by Xi Jinping. The CCP has refrained from stating the crimes committed by these individuals to this day.
What does all of this signify?
Undoubtedly, faced with internal and external changes and potential disloyalty within the party, Xi Jinping appears deeply concerned that high-ranking CCP and military officials may turn against him and the Communist Party. Not only are they shifting assets but they may also strike back at critical moments. Therefore, his apprehension about the military facing complex political challenges is reasonable.
However, as we all know, the CCP relies on statistical bureaus and the Propaganda Department to paint a rosy narrative. Failing to address economic issues with these tactics, can mere anti-corruption efforts and meetings resolve loyalty issues within the military?
That’s a wrap for today’s segment. To those who enjoy my program, please subscribe to my new channel in the comments section. In 2024, let’s pay attention to the turning points in history together!
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