BANGKOK — Southeast Asia’s crime-infested Golden Triangle, the lightly governed area where the borders of Thailand, Laos and Myanmar meet, is best known perhaps as Afghanistan’s only rival in the production of opium for the world’s illicit drug markets.
That’s why Chinese entrepreneur Zhao Wei is raising more than a few eyebrows in the region with his grandiose plan to construct a sprawling casino, resort and airstrip just inside the border in northwestern Laos, despite being sanctioned by the Treasury Department as a “threat to the United States” because of his “horrendous illicit activities.”
In addition to those projects in northwest Laos, Mr. Zhao is expanding his financial reach into northeastern Laos‘ prehistoric Plain of Jars. He is exploring other business and investment opportunities in southern Laos, close to Vietnam’s border.
U.S. allegations sanctioning Mr. Zhao say the Chinese entrepreneur has been “engaging in drug trafficking, human trafficking, money laundering, bribery, and wildlife trafficking, much of which is facilitated through the [Hong Kong-based] Kings Romans Casino,” a Treasury Department fact sheet says.
The murky Mr. Zhao, who has vehemently denied the U.S. allegations, is not just in the business for himself, Paul Chambers, an American lecturer in Southeast Asian studies at Thailand’s Naresuan University, said in an interview.
“Geopolitically, he represents the informal head of a semi-formal, strategically located base for China where Laos, Myanmar and Thailand come together: the Golden Triangle,” Mr. Chambers said. “There are increasing numbers of powerful Chinese businessmen ensconced in Laos who have loose relations with Beijing. Some have become crime bosses in the region.”
Mr. Zhao‘s flagship project, the Kings Romans Casino, is being built on the Mekong River, which the three surrounding countries jointly patrol, led by armed Chinese vessels. Several of the resort’s tall modern buildings, including a crown-topped casino, form a panoramic display visible from Thailand‘s side of the strategic river.
The Kings Romans Casino reportedly relies on Chinese currency, Chinese staff and police.
The secretive, authoritarian, one-party Laotian government has bestowed economic sweeteners, including a 99-year lease that began in 2007 in Bokeo province’s Special Economic Zone (SEZ). Analysts say it is a prime example of how China‘s communist leaders use the country’s growing economic clout and deep pockets to expand its commercial and political reach.
“It is one of several Laotian enclave developments in which China appears to exercise a form of extraterritoriality by administering almost every aspect of the zone,” the Lowy Institute in Australia said in a June report.
“Zhao Wei’s longer-term vision imagines the SEZ as a valley of shiny futuristic towers, artificial lakes, sports stadiums, industrial parks and a pharmaceutical research center. These plans are not fanciful,” the institute said.
The Golden Triangle earned its nickname decades ago from easy profits gained by international smugglers who bought illicit, locally grown opium from impoverished tribes and refined the black tar into heroin powder for addicts worldwide.
In relatively underdeveloped southern Laos, Mr. Zhao met Saravan province’s governor, Phoxay Xayasone, in March to survey land for another airport, more agricultural and tourism projects, and an upgraded road to nearby Vietnam, according to a report by the U.S. government-funded Radio Free Asia.
He is also reportedly seeking a slice of northern Laos‘ Plain of Jars for tourism and agricultural businesses, despite its UNESCO World Heritage status protecting the region’s hundreds of mysterious stone cylinders scattered in Xieng Khouang province.
In October, closer to his Kings Romans Casino, Mr. Zhao broke ground to construct a $50 million port at Ban Mom village farther north on the Mekong, near China‘s Yunnan province. The grateful Laotian government sent Deputy Prime Minister Bounthong Chitmany to the event.
The port will include cargo facilities, offices, a hotel and other infrastructure capable of handling Golden Triangle countries’ imports and exports.
Mr. Zhao is shrugging off the U.S. sanctions and has not been prosecuted by Beijing.
In 2018, the Treasury designated “the Zhao Wei network” as “transnational criminal organizations (TCO) that pose a threat to the United States,” said Sigal Mandelker, who was Treasury undersecretary for terrorism and financial intelligence.
“The Zhao Wei crime network engages in an array of horrendous illicit activities,” Ms. Mandelker said at the time.
“Operating largely through the Kings Roman Casino, the Zhao Wei TCO facilitates the storage and distribution of heroin, methamphetamine and other narcotics for illicit networks,” the department said after coordinating with the Drug Enforcement Administration.
Mr. Zhao denounced the Treasury’s sanctions as “a unilateral, extraterritorial, unreasonable and hegemonic act of ulterior motives and malicious rumormongering.”
His response in 2018, in Chinese and Lao languages, described his resort and other facilities as “legal, ordinary business operations, supervised by the legal authorities of the relevant countries that have not harmed the interests of any country or individual.”
Mr. Zhao, from northeastern China‘s Heilongjiang province, previously operated a casino in Mong La, in Myanmar’s chunk of the Golden Triangle across from Yunnan province. He also ran a casino in China‘s gambling-friendly Macao, the former Portuguese colony near Hong Kong.
To the dismay of many in the region, China‘s government and corporate sectors have emerged as by far the most prominent foreign investors in tiny Laos. China-based interests are involved in several 99-year leases in the lightly populated countryside, with abundant natural resources amid steep mountains, forests and rivers.
Thailand is the biggest export and import market for Laotian goods and services, but China is second and rising, according to the most recent official figures.
The top foreign investment is a Chinese-funded, $6 billion high-speed railway, nearing completion under China’s international Belt and Road Initiative, which some in Washington see as a thinly disguised program to buy influence with investment cash in developing countries around the world.
The railway links southern China at the Laotian border town of Boten, runs vertically across northern Laos and reaches the capital, Vientiane, on the Mekong River, where it forms part of the Laos-Thailand border. With 260 miles of track, including 75 tunnels and 67 bridges, the railway is expected to begin operating next year.
China predicts the train will eventually create a prosperous and influential “China-Indochina Economic Corridor” connecting Shanghai and Singapore.
U.S. relations with Laos are primarily mired in grim memories of the Vietnam War. President Obama acknowledged the unhappy legacy in late 2016 during the first trip to Laos by a sitting U.S. president.
Mr. Obama said the U.S. military campaign made Laos on a per capita basis “the most heavily bombed country in history.”
“Our new partnership will continue to deal with the painful legacy of war,” he added.
That legacy has weakened Washington’s leverage and given Chinese players like Mr. Zhao a leg up.
“U.S. involvement in the country, through bilateral relations, is more like a compensation for the consequences of the Vietnam War, where the U.S. left unexploded bombs,” Titipol Phakdeewanich, a political scientist at Thailand’s Ubon Ratchathani University, said in an interview.
Washington’s multimillion-dollar aid includes clearing countless unexploded U.S. bombs that litter the countryside and continue to kill and maim unsuspecting villagers. Washington also engages with Vientiane through a regional Mekong-U.S. Partnership, which evolved from Mr. Obama’s Lower Mekong Initiative to prevent China from manipulating the upper flow of the Mekong with dams.
“The Mekong-U.S. Partnership excludes China … signifying the challenge of the rising power of China,” Mr. Titipol said, and Laotian officials are happy to play the two superpowers against each other.
Benefiting from two powerful rivals vying for favor, Vientiane’s ruling Communist Party is “able to consolidate its power through good relations with both China and the West,” he said.