Chinese citizens authorised by the Democratic Karen Benevolent Army (DKBA) to operate casinos and online scam centres in and around Payathonzu Town, in Karen State are causing inflation by paying above market prices for goods and services.

The new Chinese migrants are opening businesses and renting houses in and around the town, but they are paying above market rates for rents and other goods and services. This is causing prices to rise out of the reach of locals.

Payathonzu Town is on the border by the Three Pagodas Pass border crossing to Thailand. The junta does not control the town and it is administered by a coalition of ethnic armed organisations (EAOs), all of whom operate in the town, but none of whom completely control it.

The two most powerful forces in the town are the the DKBA and the Karen National Union (KNU), which have close relationships with each other. The DKBA is the most powerful EAO in the town and it has opened many offices there. Also operational in the town and involved with its administration are the KNU/KNLA Peace Council (KPC), the Karen Border Guard Force (BGF), and the New Mon State Party (NMSP).

Though the DKBA was one of the ethnic armed organisations (EAOs) that signed the 2015 Nationwide Ceasefire Agreement (NCA) with the Myanmar Army they are not allied with the junta, though they have held discussions and worked together on some matters since the coup.

Most of the Chinese nationals who are moving to Payathonzu Town used to operate casinos and online scam centres in Karen State’s Myawaddy Town, about 100 miles further north on the Thai border. But, they were forced to leave that area due to fighting and since early May at least 3,000 of them have moved to Payathonzu Town and the surrounding areas.

The Chinese migrants are currently constructing a large casino on a big plot of land about 20 miles (32km) outside Payathonzu Town. They have also opened car showrooms and restaurants in the town, according to Payathonzu Town residents, who say they are also inflating accommodation prices by paying rents above market rates.

One of the residents said: “We have heard that more Chinese are coming to Payathonzu, with many of those who have already arrived settling around the A1 DKBA Hospital. In Payathonzu, they primarily operate casinos and engage in Zhapian [online scam] businesses. Currently, there are at least five restaurants opened by the Chinese, along with several car showrooms. Approximately 20 miles (32 km) from town, they are constructing a large casino hall resembling those seen in Shwe Kokko Town, along with a proper restaurant next to that large structure.”

Residents are concerned that the Chinese will dominate the local economy and drive prices up out of the reach of locals because they are willing to pay above normal market rates for goods and services such as house rental fees and labourers’ wages.

A taxi driver from Payathonzu Town said: “Generally, after renting a large house, the Chinese nationals set up a Starlink Internet service and run the Zhapian [online scam] business with about 10 to 15 people. They are known to pay significantly higher rents, leading landlords to eagerly lease to them. For instance, they rent houses for 15,000 THB per month, compared to the typical rate of around 4,000 THB, which has resulted in rising rents. While this isn’t an issue for them, it creates considerable stress for lower-income residents [who cannot afford the new higher rents].”

As well as paying over the odds for services in Payathonzu Town all Chinese nationals living in the town have to pay the DKBA 10,000 baht each a month to be allowed to stay there. According to locals this money is split between the DKBA, junta troops stationed in Payathonzu, and other armed groups in the area.

Since the Chinese arrived in the area and started constructing the casino and setting up scam businesses some areas of Payathonzu Town have been exempted from curfew, meaning some areas are bustling and noisy until midnight. Despite wanting to, locals do not really dare complain about these noisy businesses because they are protected by the DKBA.

Local administration announcements about the town being sent to the town’s inhabitants are also now being translated into Chinese.