The Chinese developer of a “new city” project on the Myanmar-Thai border has insisted the project is part of China’s Belt and Road Initiative (BRI), despite the Chinese Embassy in Myanmar denying the claims.
The project in Karen State, known locally as the Shwe Kokko New City after the village where it is located, was launched in 2017 by Yatai International Holdings Group (YIHG) after the company signed a deal with a local ethnic Karen armed group, the Border Guard Force (BGF).
Locals have criticised the project over what they see as a lack of transparency, as well as confusion over the scale of construction and a growing influx of Chinese migrants. Also, suspicions have been aroused over possible illicit activity and concerns about the social impacts of casino businesses.
From the beginning, the developer has claimed that the US$15-billion project along the Myanmar-Thai border was part of the BRI, which includes many projects in Myanmar.
However, the Chinese Embassy in Yangon put out a statement saying the project is a third-country investment and has nothing to do with the BRI.
Following the embassy’s announcement, YIHG released a bizarre statement on its WeChat Public Account saying, “This project is not the act of the Chinese government, but is still in service of the Belt and Road Initiative.”
YIHG also said the company was not involved in gambling or related industries, although the investors are accused of engaging in illegal casino activities in Cambodia and the Philippines.
However, the statement then says that the company “has determined” to give the casino sector a try, after the Myanmar government recently completed the process of legalizing foreign investment in the gambling industry.
YIHG’s statement comes after the Myanmar government’s establishment of a tribunal to investigate the project in response to local complaints of irregularities. However, the tribunal team has been unable to visit the site due to COVID-19.
Shwe Kokko is among three Chinese-backed projects in Karen State that represent a major challenge to US interests, according to the US Institute of Peace. The think tank alleges the Chinese enterprises involved include individuals with a deep history of involvement in known triads—Chinese organized crime groups—active in the US and now expanding into Myanmar’s Karen State.
Before leaving the country, Former US Ambassador to Myanmar Scot Marciel said that some Chinese projects, such as Shwe Kokko, needed careful analysis and local consultation, as they seemed to be bringing a lot of social ills.
YIHG didn’t deny the existence of gambling at its new city project. However, it blamed others, saying the company leased some properties to other enterprises and did not monitor their activities and business operations because it “lack[s] experience.”
“It may be that some companies got involved in inappropriate activities without the approval of the Yatai IHG,” the statement reads, claiming that this activity was immediately brought to an end once detected.
The company reluctantly admitted that it “may have introduced some criminals into the Yatai City, but as we perfect our platform, we will remain resolute in our respect for local laws and regulations, and crush all illegal activity so that the Yatai New City can better serve even more law-abiding companies.”
YIHG also said nearly 300 companies from China, Hong Kong, Taiwan, the Philippines, Vietnam, Thailand, Cambodia, Singapore and Myanmar are operating in the city.
Apparently not pleased to confine its interests to Myanmar, the company also revealed in its statement plans for a future project in Mae Sot, across the border in Thailand, where it will construct a “twin city.”
“This new city in Mae Sot will incorporate a large-scale industrial park for the medical industry, which will bring together technology, capital, medicine, medical resources, and establish a comprehensive platform for the incubation of pharmaceutical technology companies,” the statement reads.