China’s Interventions in ‘Gray Special Economic Zones’ in Southeast Asia’s Borderlands
“By connecting regions, Chinese investment projects have made it easier for these syndicates to expand their operations, particularly in weakly governed neighboring states. To receive support from host governments and add a veneer of legitimacy, they either associate themselves with Chinese state-backed special economic zones (SEZs) or create SEZs themselves. Unlike officially-sanctioned SEZs, which are designed to attract foreign investment, boost exports, promote economic development, and foster innovation, Chinese private investors sometimes create ‘SEZs’ to disguise illegal and illicit businesses. Because these zones can blend legitimate business operations with illegal activities, this article defines them as ‘gray SEZs’. These privately-established SEZs primarily exploit the tax breaks, land incentives, and lax enforcement of regulations typically found in officially-sanctioned SEZs…”
“Specifically, this article investigates why Beijing intervenes in some host countries to curb these illegal activities but not others. The types of intervention also vary. Under what conditions would Beijing intervene? What explains the variations in Chinese intervention? Why does Beijing intervene directly in some cases, such as sending its public security officials and police into host countries or working with anti-government forces in these countries, but relies on indirect measures in other cases, such as exerting diplomatic pressure on host governments? This article proposes a framework comprising the interactions between two variables, the extent of damage to Chinese interests and the willingness of actors within host countries to cooperate with Chinese authorities, to explain the variations in Chinese intervention.”
https://www.tandfonline.com/doi/full/10.1080/10670564.2025.2484205#d1e150