The Golden Triangle, is a strategic, cross-border territory in South-east Asia encompassing parts of Myanmar, Laos, and Thailand. Historically a major center for opium cultivation and heroin production, the region became a key source of narcotics trafficked throughout Southeast Asia and beyond. Over the past two to three decades, however, the Golden Triangle has developed a unique illicit economy propelled by the production of synthetic drugs, particularly methamphetamine as well as online money-laundering operations, human trafficking, casinos, and other illegal activities that have helped sustain both insurgent groups and Myanmar’s military junta. In recent years, the expansion of rare earth mining has added another layer to the region’s political economy.
Myanmar’s strategically located Shan State, which is currently fragmented among the military junta and several ethnic armed groups — including the Restoration Council of Shan State (RCSS/SSA), Shan State Progress Party/Shan State Army-North (SSPP/SSA-N), Myanmar National Democratic Alliance Army (MNDAA), Ta’ang National Liberation Army (TNLA), and United Wa State Army (UWSA) — has become a particular center of this complex political economy.
According to a 2019 report by the International Crisis Group, Shan State has emerged as the world’s largest center for the production of crystal methamphetamine, commonly known as “ice.”
“The trade in ice, along with amphetamine tablets and heroin, has become so large and profitable that it dwarfs the formal economy of Shan State, lies at the heart of its political economy, fuels criminality and corruption and hinders efforts to end the state’s long-running ethnic conflicts,” said the report, titled “Fire and Ice: Conflict and Drugs in Myanmar’s Shan State.”
Moreover, after the military junta seized power from Aung San Suu Kyi’s elected government in 2021, the region’s political and economic ecosystem continued to deepen, with new mining operations emerging in border areas, including those extracting rare earth minerals.
For the best of our weekly content！
You are now signed up for our newsletter
Check your email to complete sign up
In 2024, the Shan Human Rights Foundation reported the establishment of rare earth mines in remote border areas of Shan State. Mining subsequently expanded into new areas of the state in late 2025 and early 2026. An earlier report by Vision Times explored how the expanded rare earth mines in Myanmar’s Shan State are operated by China Investment Mining Company (CIMC), and why the development is contributing to a geopolitical contest over critical minerals involving China, India, and the United States.
On Aug. 10, Vision Times conducted an exclusive interview with Sai Hor Hseng, spokesman for the Shan Human Rights Foundation (SHRF), about the changing illicit economy of the Golden Triangle and its relationship to Shan State. SHRF is a community-based organization that documents and exposes human rights violations and the harmful impacts of natural resource extraction in Shan State.
Sai Hor Hseng: The main change in the illicit economy in the Golden Triangle during the past ten years has been the proliferation of scam centres run by Chinese transnational crime syndicates. Previously, the main illicit industries were narcotic drugs (opioids and methamphetamines) and online gambling. It was during the COVID pandemic that scam operations started, initially utilizing the existing cyber-tech capacity of the online gambling operations. The value of the scam industry in the region is estimated to be in the billions of dollars.
Chinese-backed companies began rare earth mining in the Golden Triangle region around the same time as the scam industry, but this mining is not technically “illicit.” Mining permission has been granted by the armed opposition groups in control of the extraction areas, mainly along the Chinese border, and rare earth is exported to China as a licit product.
Sai Hor Hseng: Transnational illicit operations are thriving in Shan State due to the ongoing civil war, the root cause of which is the failure of successive Burmese governments/regimes to establish a genuine federal democracy that provides equitable development across the country.
Centralized exploitation of Burma’s land and natural resources by the Burmese military and business elites has spawned armed opposition movements for decades, leading to large parts of Burma now being under the control of resistance groups. In the past, the illicit drug trade was the main means to finance armed resistance groups in Shan State — a trade from which the Burmese military also profited through corrupt taxation. In the past few years, the scam industry has become another key source of illicit income for various authorities.
Only when a genuine federal democracy is in place, putting an end to the civil war and establishing accountable governance across Burma, will it be possible to meaningfully address the illicit economy.
Instead of helping find an enduring political solution to Burma’s civil war, China has chosen to firmly back the Burmese military regime, welcoming their recent rigged elections and transition to a fake “civilian” government, and pressuring armed opposition groups along its borders to stop fighting.
With armed resistance remaining popularly supported nationwide — fueled by the regime’s increasing brutal attacks against civilians — China’s propping up of the regime is only prolonging the conflict, and thereby maintaining the state of contested governance that enables the illicit economy to thrive.
While other neighboring governments have been engaging to a certain extent with the Burmese military regime, particularly to promote their own economic interests, none has given such strong political support to the regime as China.
Sai Hor Hseng: It can clearly be seen that China is opportunistically benefitting from the current fragmented governance in Shan State. At the national level, China is pushing through deals with the Burmese military regime to expand its Belt and Road Initiative and gain influence across Burma — including the planned building of large scale infrastructure projects in Shan State, such as the Mandalay-Muse high speed railway (part of the China-Myanmar Economic Corridor linking Yunnan with the Indian Ocean) and controversial hydropower dams on major rivers including the Salween (which will serve China’s own electricity needs).
Chinese-backed mining companies have also received official permits to extract minerals in Naypyidaw-controlled areas of Shan State. At the same time, Chinese-backed companies have made deals with armed opposition groups, such as the United Wa State Army (UWSA), to mine in their territories in Shan State, including for rare earth, without Naypyidaw’s permission.
Due to the lack of democratic rights in Shan State, local communities are unable to openly voice opposition to the Chinese investments, despite suffering harmful social and environmental impacts.
At the same time, Chinese criminal scamming operations are spreading throughout Shan State, mainly now in urban and rural areas under Naypyidaw control. Crackdowns by various authorities are only a token, and thus failing to stem this spread.
Sai Hor Hseng: Unlike China, whose mining companies are dealing with both sides of the conflict, Russia has so far only been dealing with the Burmese regime. In southern Shan State, a Russian state-backed mining company has been involved in iron extraction for over 20 years, and another Russian company has recently gained a concession to mine for tungsten in a Naypyidaw-controlled area of eastern Shan State, near where a Chinese-backed mining company is already extracting the same mineral, in conjunction with an armed opposition group (the UWSA).
With the intensifying global demand for critical minerals, we expect both China and Russia to continue using their influence in Burma to expand extraction of these minerals wherever possible.
Needless to say, there has been no free, prior or informed consent from impacted communities for any of these mining operations, which will only fuel the grievances underlying the conflict in Shan State.
As for rare earth extraction, all the rare earth mines in Burma are currently in areas under full or joint control of armed opposition groups based along the Chinese border, and reliant on trade from China for survival, giving China unique leverage to pressure these groups to allow Chinese-backed companies to monopolize the extraction of rare earth. While the civil war continues, it will thus be extremely difficult for other countries, such as India or America, to gain access to these rare earth deposits.
Sai Hor Hseng: To escape the ongoing conflict, including forced conscription, large numbers of work-age youth have fled Shan State and joined labour markets in neighbouring countries, particularly Thailand.
Those that remain are increasingly being drawn into illicit work, including for Chinese-run scam centers, due to the relatively high earnings. Some work as scam callers, and some provide entertainment services, where health risks are high, particularly due to rampant drug use.
Our interviews with Burmese youth who used to work for Chinese scam companies revealed physical abuse by their employers for not meeting scam targets. In one case, a Burmese youth was trafficked with two colleagues from a scam company to work as slave labor in a Chinese rare earth mine in eastern Shan State.
The organisation has published a latest report titled “Chinese rare earth mines in eastern Shan State using trafficked Burmese scammers as slave labour” in May that’s based on the testimony by a trafficking survivor.
Sai Hor Hseng: The unregulated mining in Shan State is causing deforestation, land collapse, farmland loss, air pollution and contamination of water sources by heavy metals and toxic chemicals, impacting local communities’ health and livelihoods. Entire villages in eastern Shan State have been engulfed by toxic mud, their farmlands destroyed, and their water sources poisoned.
This has been going on for decades, but only recently has gained international attention, due to the spread of mining along Mekong tributaries in eastern Shan State, which is now causing transborder contamination of rivers in Thailand. Impacted Thai communities are calling on their own government, as well as China and the Burmese military regime to address this problem.
Original article
Comments