The Grey Capital Malaise Infecting Thailand

Thailand’s Phu Khao temple overlooks the Mekong River at the triangular junction of Thailand, Myanmar and Laos — the Golden Triangle. In 2014, a new standing Buddha statue was erected on the temple grounds, on a cliff overlooking the river. The story behind it is revealing. Whilst meditating, a local nun dreamt of the statue, imagining it blessing the prosperity, development, friendship and peace of the three nations. Former Foreign Minister Surakiart Sathirathai heard of the nun’s dream and, together with current Prime Minister Anutin Charnvirakul, raised funds for its construction. It was opened in 2017 by Thailand’s Princess Bajrakitiyabha with the respective ambassadors of Laos and Myanmar. So far, that dream is yet to be realised. Laos remains on the brink of debt default, whilst Myanmar is wracked by civil war. Moreover, in a dark irony, the statue looks directly onto one of the region’s most notorious centres of crime, the Golden Triangle Special Economic Zone (GTSEZ) in Laos’ northwestern Bokeo province, run by Chinese-origin transnational criminal Zhao Wei. 

The rise of China has brought increased trade and investment with Southeast Asia, but those benefits are accompanied by dangers in the vast flow of private capital exiting China — almost USD1 trillion between 2014 and 2017, according to Australia’s Reserve Bank. While exactly what portion of this has been invested in criminal enterprises in mainland Southeast Asia is unknown, some USD2 billion has gone into the GTSEZ alone, contributing to the development of the largest city outside Vientiane, and the growth of an industry which is now by some estimates nearly 70 per cent of the Lao formal economy. The GTSEZ is one of several “dark SEZs” across Laos, Cambodia and Myanmar. For example, Shwe Koko in Karen State in eastern Myanmar is like the GTSEZ. It is now a fully-fledged city which has absorbed hundreds of millions of dollars in construction by Chinese state-owned enterprises. Like the GTSEZ, it is contributing to scam centre revenues, which are equivalent to over 20 per cent of Myanmar’s formal economy. 

The corrosion is not only economic but also political. As analyst Jacob Sims comments, a dominant economic engine inevitably becomes a powerful political engine. Illicit capital brings about institutional capture and weakened state sovereignty. It is apparent, for example, that a monopoly on the legitimate use of force, a primary if not paramount role for a state, is being subverted by dark SEZs and associated grey capital. The Lao national police, for example, must seek permission to enter the GTSEZ. At Shwe Koko, scam centre revenues are funding the Karen National Army and the Democratic Karen Benevolent Army sufficiently to change the balance of power there. 

Despite growing awareness of the grey capital problem, it would be sanguine to assume that the Thai authorities would take the actions necessary to reduce it.

Thailand is a stronger and wealthier state than its neighbours, but endemic corruption and patron-clientelism have enabled transnational organised crime to penetrate the country. The scale of the problem produces macroeconomic effects, suggesting systematic penetration rather than isolated criminal activity. In November 2025, the Bank of Thailand governor announced moves to try to increase surveillance of ‘grey capital’ flows. This surveillance responds to concerns that inflows of illicit funds may be propping up the baht, whose value has remained surprisingly high despite the weakness of the Thai economy. 

These funds are being laundered through mule accounts. Between October 2025 and May 2026, Thai authorities found approximately 200,000 individual mule accounts, 10,000 corporate mule accounts and over 1 million linked transactions. At the institutional level, key organs of state — including the police, political parties, Parliament and the national auditor — have been shown to be vulnerable to grey capital. There are indications of political capture, such as when a Chinese transnational criminal created his own office in Parliament or when Thailand dismissed 110 immigration police for taking bribes from Chinese mafias in Bangkok. Citizenship fraud is rampant, with new cases of Chinese criminal syndicates obtaining Thai citizenship through corruption of Thai officials revealed on an almost monthly basis. Once citizenship is obtained, investigations have revealed that new companies can be easily launched, facilitating more money laundering and more corruption. Procurement fraud has even affected the agency responsible for the proper use of state funds. After Thailand’s State Audit Office building collapsed in 2025, investigations revealed that China Rail Engineering Company, the same contractor which was building Thailand’s high-speed rail project, had circumvented Thai law to bid for the contract by using nominees. It had colluded with SAO officials to win the contract.

Looking Ahead

Despite growing awareness of the grey capital problem, it would be sanguine to assume that the Thai authorities would take the actions necessary to reduce it. While investigations are sometimes conducted and charges laid, there have been few successful prosecutions to date. Tu Hao (also known as Chaiyanat Kornchayanant, a Chinese-born businessman who acquired Thai citizenship) and Wang Hongbin (also known as Oudom Hongbin, a Chinese-born entrepreneur with Laotian and Vanuatan passports), significant grey capital actors, were both investigated by Thai police but remain at large. Many Thai politicians and security officials are never investigated or charged, even when the evidence is significant. In 2024, People’s Party MP Rangsiman Rome presented Parliament with detailed evidence of Thai military and police officers’ involvement in casinos and scam centres operating in eastern Myanmar. Rome cited more than 17 casino businesses with Thai owners or Thai partners, including a significant number owned by Thai uniformed personnel. In response, the then Pheu Thai government was silent. The Bhumjaithai government appears similarly passive, despite some statements calling for the eradication of corruption.

Consider the case of Anutin Charnvirakul’s former deputy Finance Minister Vorapak Tanyawong. Credible evidence of Vorapak profiting from the laundering of a scam centre emerged, but after he stepped down, no further action has been taken. Instead, he is suing the journalist responsible for unearthing the evidence. With such entrenched impunity and only performative policy actions, it is of little surprise that Thailand’s ratings in the corruption perception index continue to decline.

Thailand may be more resilient than its neighbours, but it is by no means immune. That grey capital is already corroding the country’s institutions and capacity suggests that it is spreading beyond the region’s weak or war-torn states and fast becoming a defining feature of mainland Southeast Asia’s political economy.

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