Scam Logistics: Building and Governing the Digital Illicit Economy in the China–Myanmar Borderlands

Research Paper

30 Jul

Written By Kirsty Matthewson

July 2026

Research Paper 44

Xu Peng (Manchester / SOAS CIVAD)

SOC ACE Project: The centrality of the margins: Borderlands, illicit economies and uneven development

PUBLICATION SUMMARY

Online scam compounds have become one of the fastest-growing forms of organised crime in mainland Southeast Asia, generating an estimated US$18–37 billion in 2023. While often viewed as purely digital fraud operations, this research argues that scam compounds are deeply rooted in the political, economic and physical landscapes of the China–Myanmar borderlands.

Focusing on the northern Myanmar–China corridor, the paper examines how these operations are built, governed and sustained through cross-border trade routes, recruitment networks, communications infrastructure and financial systems. Rather than existing outside state control, scam compounds operate within fragmented systems of governance involving ethnic armed organisations, militias, state officials, brokers and other intermediaries. These actors regulate access to land, labour and resources, while periodic enforcement actions often disrupt operations only temporarily, leaving the underlying protection networks intact.

The research also highlights the importance of physical infrastructure in enabling cyber-enabled crime. Scam compounds rely on reliable electricity, telecommunications, internet access, transport routes and supply chains to support both daily operations and sophisticated fraud activities. Digital tools, including AI-assisted translation, customer relationship management systems and cryptocurrency, are only effective because they are supported by people and infrastructure capable of recruiting workers, transporting equipment and maintaining connectivity across contested border regions.

The paper further explores the moral economies that underpin scam compounds. Recruitment is frequently framed as economic opportunity, while exploitative practices are justified through narratives of debt, training costs or maintaining local order. At the same time, scam revenues can contribute to local businesses and infrastructure, creating complex relationships between economic dependence and social harm.

Overall, the paper argues that scam compounds should not be understood as isolated criminal enterprises, but as embedded components of wider political and economic systems. By examining the intersection of governance, infrastructure and coercion, the research provides new insights into how illicit digital economies are sustained through contested borderland spaces and the broader processes of regional development and global capitalism.

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