China’s Gray Zone Syndicates
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China’s Gray Zone Syndicates
A three-part investigative series on how China’s shadow financial ecosystem has evolved — from a sanctions buffer into a global risk network.
By Adam Rousselle, Chief Analyst at Between the Lines
Why you should read this series
Unpacks Beijing’s evolving strategy: Originally designed to shield China from Western pressure, gray-zone financial tactics have fractured into decentralised, self-sustaining criminal networks.
Explains hidden geopolitical feedback loops: How shadow reserves spilled into Southeast Asian SEZs, casino hubs, and scam centers, fueling regional crime economies that now threaten global financial stability.
Maps the fallout for the West: From Canadian real-estate distortions to U.S. crypto AML risks, and European exposure to opaque SEA-capital corridors.
Powered by forensic finance and first-hand experience: Featuring sources from Elliptic, Chainalysis, Nikkei, ASPI, UNODC, diplomatic cables, and leaked Telegram logs. These combined with Adam’s near decade-long experience in China and Southeast Asia provide invaluable insights into this complex emerging global threat.
Series Overview
Part I - Criminal Convergence: How informal criminal networks became a weapon of Chinese statecraft
Part II - The Reversal: How shadow reserves and capital outflows now threaten Beijing and wreak havoc around the world
Part III - Connected Heat: Risks to global markets and long-term threats to China’s internal cohesion
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Get each installment delivered straight to your inbox. Paid subscribers receive early access, audio readings, source documents, and subscriber Q&As.
Up Next: Part III — Connected Heat
Coming This Week – Paid Subscribers Only
In Part I: Criminal Convergence, we traced how China began leveraging transnational criminal ecosystems—scam syndicates, offshore gambling hubs, and laundering proxies—to extend its influence across Southeast Asia. These networks, often dismissed as local or incidental, were in fact strategic infrastructure: designed to operate below the threshold of formal conflict, with just enough distance to maintain plausible deniability. Perfect for avoiding tariffs and even sanctions.
Part II: The Reversal exposed how China’s shadow financial system—initially built to insulate against sanctions and capital flight—has begun to splinter from within. As informal liquidity spread beyond Beijing’s control, regional SOEs, PLA-linked firms, and elite actors started improvising with gray-market tools. The result? Strategic ambiguity gave way to strategic disunity, echoing historic periods of Chinese decentralization and internal fiscal fracture.
Now, in Part III: Connected Heat, we turn to the global blowback.
Western institutions—from crypto OTC desks in Colorado to property markets in Toronto and regulatory blind spots in Europe—are increasingly entangled in this gray-zone ecosystem. Stablecoins laundered through Southeast Asia. Chinese capital embedded in real estate-backed securities. European banks onboarding affiliates linked to underground financial rails.
China tried to build a sanctions buffer. Instead, it built a heat trap. And now it’s leaking into the global system.
This final installment explores how a system designed for Chinese resilience may end up destabilizing the very global markets it depends on—and how the next financial shock may come from a node no one is watching.
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About the Author
Adam Rousselle is the founder and chief analyst at Between the Lines, an independent research platform focused on illicit finance, dual-use technology, and geopolitical risk.
He has lived and worked in China and Southeast Asia for over eight years, with on-the-ground experience in commodities analysis, shadow economies, and political risk forecasting. His work has appeared in publications such as Nikkei Asia, The Wall Street Journal, and across multiple think tanks and investigative research outlets.
Through Between the Lines, he tracks the dark intersections of power, capital, and conflict—mapping what others miss.
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Nothing in this email is intended to serve as financial advice. Do your own research.
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