The Political Economy of Border Checkpoints in Shadow Exchanges

ABSTRACT

This introductory article revisits cross-border shadow exchanges in a comparative perspective and reflects on their theoretical implications. It explores the diversities and complexities of shadow operations and critically examines the concept of informality that is commonly used to describe such non-state-sanctioned practices. It further underlines the key role played by checkpoint politics in border governance. Border checkpoints serve both as a state institution in regulating border crossings as well as a political site where material and power exchanges among state and non-state actors are negotiated. Such negotiation of selective passage through state-controlled gateways is often predicated upon the skilful manipulation of time and space by experienced traders and brokers.

KEYWORDS:

• Shadow economy
• cross-border exchanges
• informality
• mobility
• borders
• checkpoints

One characteristic of the contemporary global political economy is the transnational flow of resources. Yet the well-documented activities of trade, foreign direct investment, migration, and related activities constitute only a portion of all cross-border exchanges. The rest is undertaken in the shadows of these registered exchanges. Every day, vast networks of people and organisations shuffle goods, money and humans across the globe’s borders. While operating in shadows, these transactions are substantial and crucial for domestic, regional and global economies. As one observer comments, if shadow exchanges collapsed overnight, the world economy would be in chaos (Nordstrom 2000, 38).

Despite the proliferation of cross-border shadow exchanges, our understanding of such activities is limited. This is reflected in the absence of commonly agreed terms to denote such activities. Depending on the assumptions held by the researchers, they are variously described as shadow, underground, informal, black, grey or illicit. These terms share an emphasis on informality as a defining characteristic in the organisation of such exchanges. The existing scholarship has mostly explored the informal networks found in individual country cases (see, for example, Turner 2013; Lada and Connell 2014; Lee 2015; Sabet 2015). Comparative studies of cross-border exchanges in Asia are, however, relatively rare. More important, the core issues of transnational exchange, informality and borders have tended to be studied in isolation, resulting in insufficient theorisation about their inter-relations. The varieties of border exchanges, the diversities of bordering practices and the variations in informality have not been sufficiently considered.

The aim of this article is to undertake a modest revisit of cross-border shadow exchanges in a comparative perspective. Specifically, we seek to highlight two issues: first, to examine border exchanges to understand the diversities and complexities of shadow operations; and second, to investigate the checkpoint as a unique institution in shaping cross-border exchanges. The border checkpoint is a political institution common to all nation-states. It is the prime establishment responsible for regulating trans-boundary movements and enforcing the selective permeability of borders. However, unlike other state institutions (such as the legislature, judiciary, planning agencies, police and so on), border checkpoints have received little scholarly attention. This is surprising given the expansion of research on borders in recent years. While many observers have recognised the complexity and dynamism of borders, few have looked at the instrumental roles played by checkpoints in shaping border dynamics. Likewise, although discussions on the informality of cross-border exchanges abound, there is a dearth of evidence about the ways checkpoints configure that informality. By underlining this interlocking institution, we hope to explore new ways of studying the governance of cross-border shadow exchanges.

In this special issue, we use the term “checkpoint politics” to refer to the material and power exchanges among state and non-state actors in negotiating the selective permeability of borders through state-controlled gateways. Using different country case studies, the articles in this special issue seek to show that checkpoint politics contributes to a kind of dynamic border governance. Shadow exchanges adapt to particularistic governance mechanisms and proliferate under collaborative schemes. The cases studied span shadow exchanges across internal borders in southern China (Hung and Ngo 2019) to exchanges along the Cambodia-Vietnam frontier (Mahanty 2019), Thailand-Laos checkpoints (Elsing 2019) and the China-Pakistan border (Rippa 2019), to transregional exchanges in Central Asia (Karrar 2019) and to transcontinental exchanges between China and Africa (Haugen 2019).

We use the term “shadow” out of expedient considerations. It contains less conceptual prejudice than terms such as illicit, underground or grey economy that imply an act of criminality. It also has less binary connotation than the term “informal” exchange, often defined in opposition to the formal sector. Such a binary conception has already been rightly criticised in the existing literature. However, the term “shadow” is not without problems. It still implies activities not legitimately undertaken in the open, even though many such activities are conducted under broad daylight with tacit official approval. Yet, elsewhere we have argued that commonly used concepts such as this allow easier access for a broader audience and create space for new vocabularies to develop as inquiry progresses (Ngo 2015, 47). Instead of creating a neologism, we intend to engage with the dominant discourses about informality, illicitness, grey economy, and so on without being held captive by it.

Significance of Cross-Border Shadow Exchanges

We begin with a brief review about the ways shadow exchanges have been perceived in the existing literature. Typically, trans-border exchanges that are not sanctioned by state authorities are considered to fall within the realm of the shadow. The most common perspective seeks to identify the reasons why shadow economies exist at all, especially in regions where there should be little incentive to engage in shadow activities (Koff 2015). Students of development studies tend to explain their existence in terms of survival strategies of local inhabitants in response to their exclusion or marginalisation in the formal market (see Pohit and Taneja 2000; Walther 2009; Njikam and Tchouassi 2011). An alternative explanation about the rise of shadow activities underlines the nature of transitional economies where weak or dysfunctional governance mechanisms failed to effectively regulate economic exchanges (Eilat and Zinnes 2002, 1236). Still others emphasise either the weakness of state power in peripheral border regions or the deliberate defiance of central policies by local authorities (see, for example, Cornelius 2004). They see shadow exchanges as challenges to the authority of the nation-state in the scalar restructuring of borders. In contrast, criminologists and economists alike look at underground transactions across state borders in terms of organised crime and focus on the organisation of illegal activities such as human trafficking, smuggling and money laundering (see, for example, Naylor 2004; Naím 2005; Shelley 2010).

Although each of these lines of inquiry has its own conceptual categories and scholarly interlocutors, they all tend to understand shadow exchanges as either marginal, inadequate, pathological or arising from dysfunctional regulatory governance, evident in informal practices. Yet decades ago Castells and Portes (1989) warned against equating informality with marginality. They noticed that many informal activities generated relatively high levels of profit or income and that these activities are not confined to activities of the poor. On the contrary, shadow exchanges are part and parcel of contemporary economic life and can be found in both rich and poor countries and regions. The real paradox lies in the rise and expansion of shadow exchanges in highly regulated contexts, rather than in the practice’s marginality.

The significance of shadow exchanges in contemporary economic life can be reflected in the scale of operation. Take “suitcase trading” as an example. This is the most common form of cross-border shadow exchange when traders hand-carry their goods to evade border control. By disguising taxable commodities as personal items, suitcase traders effectively escape customs and taxations. In Central Asia, an estimated 20 to 30 million people have engaged in suitcase trade (Humphrey 2002; Mukhina 2009). As Karrar (2019) suggests in this special issue, the shadow economy constituted by suitcase trade and bazaars has contributed significantly to the regional economy, and therefore received tacit support from the state and the political elites. In another article in this issue, Mahanty (2019) notes that in Cambodia revenues extracted from shadow exchanges have been used to support the ruling regime. In southern China, more than 20,000 suitcase traders have been crossing the sub-national border between Shenzhen and Hong Kong every day, as reported in the article by Hung and Ngo (2019). These traders formed an indispensable link between local and global value chains that connect the domestic Chinese economy and the world market.

Although most shadow exchanges take advantage of regulatory loopholes, it is a misunderstanding to consider such activities as nothing but the product of either dysfunctional governance or transitional regimes. The southern Chinese suitcase trade is a case in point. Hong Kong has a mature and wealthy economy and effective border control. Yet millions of shadow traders cross the border between Hong Kong and Shenzhen each year, in both directions. Other examples abound, with the most notorious including the massive shadow trade across the US-Mexico border (Andreas 1996). It is evident that advanced developed economies are not exempt from such activities.

Because of this fact, Abraham and van Schendel (2005) caution against “seeing like a state” in conceptualising transnational flows, when activities and exchanges that are not state-sanctioned are pushed to the realm of marginality. Gootenberg (2005) further warns against “talking like a state” in an unconscious reproduction of official languages and categories to “pathologise” non-state-sanctioned practices. As a point of departure, we share with Nordstrom (2000) the idea of seeing the shadow economy as a parallel system to the formal economy. Just like the traditional Chinese view, yin (shadowy) and yang (sunny) are mutually constitutive in the perpetuation of cosmic order. Our understanding of the global economic order will remain deficient until we realise the central role of shadow activities in transnational exchanges.

Characterising Shadow Exchanges

Unlike the regulated, legally enforceable contractual exchange in the formal economy, shadow exchanges are often based on interpersonal networks and trust. Because of that, there is a tendency to characterise cross-border shadow exchanges as a kind of informal activity. We do not intend to challenge this common characterisation, but we argue that it requires qualification.

Before we underline those qualifications, it is worth reiterating the criticisms of the dualist model of the formal-informal sectors. Critics have rightly pointed out that there is a high degree of fluidity between the so-called formal, informal and illegal activities. On the one hand, there are systemic connections between the supposedly separated formal and informal sectors. On the other, trading activities can be formal and informal, as well as legal and illegal, at the same time, making bipolar categories problematic (Galemba 2008). As Haugen (2019) shows in her article on intercontinental trade between China and Africa, traders in southern China’s Guangzhou have mixed ways of moving goods to Africa by making use of formal channels including container shipments, air cargo, courier service, groupage (where people/companies consolidate their goods for shipment to reduce costs) and informal arrangements such as suitcase carriage, as well as grey practices such as buying and selling of luggage allowances via logistic brokers. Such transnational trade thus transcends the formal/informal category. Recent scholarship has also underlined a growing integration of the informal economy into the global value chains. Academic concern has thus shifted from the dualist distinction between formal and informal sectors within the framework of the nation-state to the impacts of informality on the global economy (Meagher 2013, 12).

In terms of cross-border exchanges, informality often exhibits further twists and turns. Cross-border shadow exchanges differ from the typical urban informal activities in several aspects. First and foremost, many actors engage in cross-border exchanges neither because they are driven out of formal employment nor because they find shadow exchanges more profitable. Instead, they venture into the trade to take advantage of the market opportunities made available by the selective permeability of border control. Many suitcase traders engage in shuffling goods across the booming Asian economies for relatively easy money. They may not earn a lot from each petty transaction, but the activity is flexible, has few entry and exit barriers, requires little effort and skill and involves low risks. Cross-border shadow exchanges thus represent an attractive and alternative source of income for both regular and occasional traders.

More important, the reliance on informal and interpersonal networks in shadow trade reflects anything but a technical inability to fit in with the state’s control techniques. In fact, it reflects a strategic capacity and competence in navigating state control; in the presence of border control, informality is a rational strategy to exploit the grey areas in state regulations. As the case studies in this issue show, while individual traders may join the trade in a casual and unskilled manner, the entire operation can be highly organised. The success of shadow operations depends on the strategic decisions of experienced traders and brokers about what goods to carry across which checkpoints in what quantity and at which time slot. Such strategic competence derives from experience, co-ordination skills, local knowledge, and network resources. In this regard, it is mistaken to equate cross-border informality with inferior practices or the lack of organisational resources and sophistication, as analysts of the informal sector often assumed. Compared to formal practices in the open economy (with firms as the dominant actors), informality is best seen as an alternative way of co-ordinating economic activities with its own logics and norms.

Furthermore, informality in cross-border exchanges typically relies on networks that link state and non-state actors together. This stands in contrast to the common urban informal sector where networks are built among families and friends, while keeping the state at bay. In other words, if the urban informal sector is organised around socio-economic networks, informality in border crossing depends as much on political as social networks. Political networks form an indispensable link in cross-border informality because official discretion in the selective enforcement of border control plays a key part in the trade. As contributors to this issue argue, reciprocity and power exchange/negotiation between border guards and traders becomes a routine exercise during cross-border transactions.

In view of these distinctive characteristics, it is more appropriate to view informality in cross-border shadow exchanges as a specific form of relationships of production and exchange that is unregulated or tolerated by border checkpoints (see Castells and Portes 1989, 12–13). Similar to the plurality of productive and exchange relations in the open economy, informality in shadow exchanges exhibits huge variations across different border regions and markets.

Diversity, Forms of Informality and the Intersection of Mobility

Existing studies by criminologists and political economists tend to categorise shadow exchanges in terms of the legality and formality of the goods and practices. They include such categories as illegal and dangerous goods (such as drugs and weapons), illegal and immoral practices (human trafficking), illicit but non-dangerous goods (including endangered animal products and money laundering), and licit but non-legal exchanges through informal practices (the suitcase trade). We call this a shades-of-grey taxonomy, under which shadow activities are categorised according to the degree of illicitness. One can expect that the nature of informality (in terms of the reach of networks, levels of sophistication, and forms of transaction) changes in relation to different shades of grey. For instance, Hung and Ngo (2019) find that suitcase trade involving daily consumption goods has been carried out by either occasional traders working in solitude or professional couriers with open networks; while suitcase trading of valuable products and illicit goods is undertaken by professional couriers with a closed network. In general, the “darker” the operations, the closer and stronger the networks will be, and the more covert the transactions will be.

Further comparative inquiries indicate that the diversity of informality in shadow exchanges varies along several dimensions, namely, the reach of the networks, the professionalisation and organisational sophistication of informal operations, and the nature of transactions. These are closely intersected and shaped by forms of mobility, types of borders, local political economies, and checkpoint politics.

First and foremost, the reach of the informal network varies. Current studies have mostly underlined the importance of familial and friendship ties as forming the backbone of informal networks. The comparative studies in this issue show that this is just one type of network. Other networks abound, extending beyond familial and personal ties to involve multiple stakeholders, bridging the formal-informal sectors, reaching across the two sides of the border, as well as encompassing both state and non-state actors. Such varieties can be seen in our case studies. Along the Thai-Lao border, as Elsing (2019) in her article for this issue notes, trade is carried out by individual female traders, relying mainly on kinship and friendship ties. They shuffle goods over short distances and within the proximity of the border. This stands in contrast to the shadow trade in Central Asia, where the Eurasian trading networks span vast distances and across numerous national borders, making it truly transnational in nature. Here bazaars and shuttle trades are connected, as Karrar (2019) shows. Despite being transnational, the operation remains informal and small in scale. Suitcase traders mostly rely on close personal networks, and seldom form impersonal business partnerships in a substantial way.

More complicated networks in the Pakistan-China shadow trade are observed by Rippa (2019) in his article for this special issue. He notes that Pakistani traders operate within trading networks that stretch well beyond Tashkurgan and Sost to reach markets in Gilgit, Rawalpindi, and Karachi, Peshawar, and Kabul at one end, and Kashgar, Guangzhou, and Yiwu at the other end. The traders make extensive use of social media and digital technologies to maintain their contacts and keep up with market information. Yet physical distance is not necessarily the reason for the presence of a long chain of networks. The timber and cassava trading networks organised around and across the Cambodia-Vietnam border are connected to a vast number of actors, including not only timber loggers and cassava farmers, transporters, traders, border customs and border police, but also landlords, village heads, local political elites, border military, tax authorities, and even national-level authorities. They represent social as well as commercial and political ties. In her article, Mahanty (2019) further shows us that within the same region, the timber network and the cassava network differ substantially, as shaped by different land dynamics.

Compared to these cases, the suitcase trade in the Pearl River Delta region of southern China is based on a different type of network. The trade is carried out by tens of thousands of traders and couriers recruited through various means. The couriers are not petty traders acting in solitude, but are hired by large syndicates that run the business in the manner of a commercial logistics firm. All in all, these comparative cases illustrate the diversity and complexity of informal networks and warn against conceptualising informality in a one-dimensional way.

Second, the degree of co-ordination varies. Informal operations in shadow exchanges differ in terms of professionalisation and organisational sophistication. We have noted that cross-border exchange along the Thai-Lao border is carried out by individual female traders who shuffle goods within the proximity of the border. This kind of operation is relatively simple and straightforward. In contrast, in the Pearl River Delta, shadow trade is highly organised and commercialised, while still relying on informal networks. Hung and Ngo (2019) have identified several modes of operation with different degrees of sophistication. Together they appear almost like a logistics sector of their own, catering for different types of clients and goods. In the most sophisticated form, syndicate networks operate with well-defined divisions of labour, and routinely co-ordinate transactions among sourcing agents, suppliers, distributors, couriers, collectors, drivers, warehouse keepers and retailers. Besides, these syndicates oversee the trade flow, respond to market signals, co-ordinate sourcing and distribution, arrange transportation and co-opt/manipulate border control. Hung and Ngo (2019) call this “organised informality,” since it contains both informal and organised aspects. While the network is stable, resilient and well-coordinated, individual traders can come and go, join and exit the network, in a casual and informal manner.

Third, the nature of transactions also varies, even though they are all conducted in an informal manner. In the Southeast Asian and Central Asian cases discussed in this issue, transactions are undertaken between family members and friends and hence are largely based on trust. In the southern China case, transactions are more “market-oriented” and impersonal. Various mechanisms are devised to enforce the informal contract and to ensure the completion of transactions according to the agreed terms.

All these variations show the rich diversity in the nature of informality. It cautions us against reducing informality to nothing more than personal networks based on trust. Furthermore, various forms of exchange and mobility often intersect to give rise to specific patterns of connectivity. This is well-illustrated in the China-Africa case where exchanges take place not across adjacent borders but between long-distant territories. From the outset, different types of mobility are interlinked. As Haugen (2019) argues in this issue, the settlement of some African sojourners in China enables the mobility of others (particularly the itinerant traders), by serving as go-betweens to bridge the domestic and the transnational trading networks. Equally intriguing is that itinerant traders also circulate capital and goods when they commute between China and Africa. Traders travel to China to source their goods and place their orders in terms of air cargo and container shipment. On their return trip, they act like suitcase traders, carrying higher-value goods in their suitcases, which they sell immediately on arrival home. The money from these suitcase sales is remitted through hawala networks of informal money transfer to pay for the merchandise waiting for shipment from China as cargo. After the shipment arrives, the merchandise is also sold. In this way the traders then have sufficient cash for another trip to China and to circulate their capital. Shadow exchanges in commodities and money capital thus go hand in hand in a double loop.

The transnational exchanges between China and Africa represent a kind of “low-end globalisation,” in the words of Mathews and Yang (2012, 97), where traders with limited capital and resources carry out long-distance, intercontinental exchanges through a combination of legal and shadow, formal and informal means. Yet it is not the distance or the scope of coverage that is central for the authors in this issue. Rather, it is the circuit of value conversion. Low-end global exchanges are possible because shadow mobilities in commodity, human and capital have been intricately linked. The value/profit created in one type of exchange is immediately plugged into another venture to sustain the long process of transnational connectivity. In other words, the commodity-capital-labour power circuit is efficiently and effectively organised.

Borders and Checkpoints

In research about transnational shadow exchanges, the question of borders looms large. However, the idea of “borders” has been under critical scrutiny in recent years. The Westphalian idea of sovereign states with clear and demarcated territorial borders has been criticised for creating a conceptual fixity that differentiates exchanges within the state border from those between state borders. In reality, borders are diffuse and fluid. Observers have now recognised the complexity and dynamism of borders. For example, Balibar (2002) challenges the long-held assumption that borders fall under the exclusive jurisdiction of the nation-state.

One group of critics on the rigidity of borders reminds us that there is often incongruence between the political boundary and the social and economic spheres of activities. In most borderlands, we can find social communities and economic networks spanning the political divide upheld by territorialised states. Many of these communities were in place prior to the formation of the modern nation-state or before the reification of state borders. The pre-existing networks of kinship, clanship, and business partnership are seldom eliminated by the imposition of political boundaries. Such “transboundary social formations,” in Herzog’s (1990, 135) terminology, undermine the rigidity of borders. In fact, the demarcation of political borders often revitalises transboundary social formations because state policies on one side of the border may create relative scarcity of goods and services. The politically contrived scarcity generates demand, where the supply channels can be easily established by mobilising pre-existing cross-border networks. It is in this sense that Newman and Paasi (1998) emphasise the connectivity of borders. Political and economic division aiming to assert the sovereign state in effect facilitates the flow of not only people but also of goods across the border. According to Baud and van Schendel (1997), this represents a gap between the rhetoric of border maintenance and the actual daily life in borderlands. They criticise traditional border studies in adopting a view from the centre and urge instead to embrace a perspective from the periphery.

More radical critics like Balibar (2002) argue that borders are not only soft and porous, but also diffused and everywhere, spreading beyond the national edges. Because of that, borders are by no means always at the edge or periphery. Borders can be located away from the border. Dry ports, free trade zones and special economic regions are good examples. In recent times, the global flow of goods, capital and labour has accelerated and achieved a penetrative reach into every corner of society. The advancement of e-commerce, internet banking, courier logistics, and so on, have rendered conventional territorial and physical boundaries increasingly obsolete, especially in terms of commodity trade. Trans-border exchanges are now organised in rhizomatic manner (Deleuze and Guattari 1988). Like a rhizome, any point of contact in trans-border exchanges can be connected to another; an established network of exchanges may be broken up but can be re-connected along old or new lines; the web of exchanges exhibits multiplicity and has become a truly worldwide web, both in information and in material transactions. In this rhizomatic cartography, borders become mobile and multifaceted, with overlapping loyalties (Beck 2000). This has led radical critics such as Parker and Vaughan-Williams (2009, 583) to claim that borders are “increasingly ephemeral and/or impalpable.” Although we doubt about the withering away of borders, we share the concern that borders are increasingly diffuse and fluid, and hence the urge to problematise the concept of borders.

The articles in this issue reflect on the multi-scalar nature of borders and border towns as well as their connectivity. For instance, the border region of Xinjiang has become the centre of transnational exchanges linking Central Asia to East and South Asia. Likewise, border towns such as Loei in Thailand, Kordoi and Kara-Suu in Kyrgyzstan, and Kashgar in China are all pivotal centres of trade and trading in their own right. They are the port of entry and exit from which the trading networks extend well beyond the borderlands to every corner of the region. As such, borders are understood by Sohn (2016) as complex assemblages or as multi-scalar entities by Laine (2016) with different symbolic and material forms. In particular, “the national border is not necessarily experienced only as an immediate limit, but may be perceived as a local phenomenon, the edge of a nation-state, a transnational staging post, or it may be reconfigured as a portal” (Laine 2016, 472).

The revised concept of the border has given rise to a re-conceptualisation of cross-border activities. Different researchers have sought to capture such dynamic and contentious processes by introducing neologisms such as “bordering practices” (Parker and Adler-Nissen 2012), “borderwork” (Rumford 2012), “borderities” (Amilhat-Szary and Giraut 2015), and “borderscapes” (Brambilla 2015). The rich theorisation, nonetheless, has not been matched with equal empirical vigour. There is a dearth of comparative studies that can test the usefulness of these conceptions. From the outset, there are different bordering practices, depending on the types of border as well as border crossings. Border crossings vary a lot. For instance, the Cambodia-Vietnam border has numerous crossings, ranging from loosely guarded local crossings with limited road accessibility to heavily policed international crossings connected by modern highways. In the sub-borders between Special Administrative Regions of Hong Kong and Macao and mainland China, although all the crossings are “internal” gateways within a national border, they are guarded with several layers of checkpoints. The number of commuters and traders passing through these “internal” crossings is higher than any of the international crossings at the Chinese borders. In contrast, some traders along the Thai-Lao border have continued to make use of unmarked crossing sites in Loei to shuffle goods across national boundaries.

The variations in the nature of borders, the type of border crossings, the bordering practices, and the ecology of border towns present a challenging agenda to pursue comparative studies of border exchanges. In this issue we seek to highlight the relevance of checkpoints in relation to the political economy of borders as gateways of resource flow, the contentious politics surrounding border maintenance and modification, and the diversity of actors and institutions involved in various forms of borders and bordering practices.

Checkpoints and the Political Economy of Time and Space

Earlier we mentioned that checkpoints play an important role in shaping the regulation and co-ordination of informal trans-border exchanges. They are also the point of power negotiation among state and non-state actors in the maintenance and modification of borders as an institution of inclusion/exclusion and selective permeability. Taken together, checkpoints play an indispensable role in trans-border exchanges.

While we endorse the view about the fluidity of borders and the non-exclusive role played by the state, it does not mean that state power is absent in gatekeeping or that national borders do not exist anymore. In reality, in most instances, their presence is visible and clear. In general, borders are heavily policed in the name of national security. Border crossings are allowed only at sanctioned points of entry and exit. These gateways are usually guarded by armed and militarised forces and passage is only allowed under conditions rectified by law and upon the possession of approved documents and papers. Such militarised checkpoints, usually in the forms of immigration and customs tools, represent state power in its exercise of selective passage.

Different types of border crossings are guarded by different state agencies such as customs, immigration, border police and military. Very often, a significant difference can be found between the two sides of a border in terms of strictness of checkpoint control. In the Cambodia-Vietnam border, for instance, the Vietnamese side sees strong military presence in the checkpoints while the Cambodian checkpoints are mainly staffed by border police. At the Hong Kong-mainland China sub-border, the Hong Kong customs rarely check for tradable commodities; it is the mainland checkpoints that monitor suitcase trading. In the same vein, Thai and Laotian officials also exhibit differential border enforcement in their border.

In fact, an overwhelming proportion of trans-border shadow exchanges are channelled through checkpoints. Informality plays a major role during this process, not only for traders but also for gatekeepers and state actors. Checkpoint politics allow state actors to play a structuring role in shaping cross-border exchanges. It enables state actors to exercise discretion in enforcing border selectivity in terms of deciding which kinds of goods to let go, in what quantities, by whom, at which checkpoints, and in what moments. As Mahanty (2019) aptly puts it in her article, such a structuring role of state actors derives from their regulatory mandates, but they apply and extend the mandates informally to meet their personal interests. Checkpoint politics everywhere is characterised by this combination of regulatory power, flexible application, and official discretion. It constitutes another form of informality.

The negotiation of passage is thus a key activity of checkpoint politics. It is predicated upon skilful manipulation of precarity in terms of space, time and agency. It constitutes a kind of adaptive governance that accounts for the resilience of shadow activities. In all of our country cases, the political economy of space impacts skilled traders and brokers who alter their paths of movement in response to frequent changes in the control routines, customs fees, import/export bans, or crackdowns at various points of border entry. Experience allows brokers to navigate precarity and to circumvent restrictions creatively at different checkpoints.

An equally important dimension in the negotiation of passage is the political economy of time. Again, this hinges upon the skills and experience of traders and brokers in synthesising and synchronising different junctional dates, timetables and schedules (Nikolotov 2017). These schedules include timetables of trains and shipments, rosters and work shifts of border guards and customs, the rhythm and intensity of the flow of people and goods during specific times at particular border gates, potential moments of official crackdowns on smuggling and suitcase trade, and so on. Synthesising the disjunctive information and assessing the potentiality of risk will enable experienced brokers to navigate their border passage successfully, as well as to exploit backup plans or alternative routings effectively.

Besides timing and location, the organisation of brokerage also forms part and parcel of the strategic negotiation. Brokers adapt their activities and movements to circumvent possible blockage at checkpoints. One typical example is the dispersion of traders in the form of suitcase couriers. Goods are split in small quantities before the checkpoint, and then re-assembled after individual couriers carry them through the customs. In contrast, smugglers of illegal goods such as hard drugs and weapons will avoid checkpoints altogether. In fact, in the long history of trans-border trades in Asia, checkpoints have always played a crucial role in shaping the organisation of non-state-sanctioned exchanges, such as in the Nanyang junk trade and coolie trade of the seventeenth to nineteenth centuries. And since the institutional arrangement and the regulatory mechanism of checkpoints vary from border to border, so do the brokering practices and co-ordination methods.

As such, checkpoints are gateways regulating resource flow across borders. Cantens, Ireland, and Raballand (2015) argue that borders are points of negotiation in the global flows of wealth. To be more precise, checkpoints, not borders, are the actual points of negotiation. They are the physical venue and the institutional arrangement where different kinds of wealth are allocated: customs and taxes appropriated into state purse, bribes pocketed by border officials, profits reaped by owners of goods, payments received by gangs or organisers of cross-border exchanges and remunerations earned by petty traders, couriers, drivers and so on.

During the process of selective passage and hence wealth allocation, checkpoints are not always working in the service of the state. The seminal work of Walker (1999) on the borders of Thailand, Laos, China and Burma shows that the state has never been able to monopolise regulatory practice in the wake of successive regulatory regimes since the nineteenth century. Ironically, authoritarian and highly centralised regimes such as China are no more effective than democratic, decentralised states such as India in controlling informal exchanges and in tracking down cross-border movements. In most cases, the licitness of social and commodity movements is repeatedly renegotiated because: first, the definition of licitness is often at the discretion not of the central state but of border officials; second, as mentioned above, competent border-crossers can organise their exchanges along grey areas; and third, there is often a symbiotic relationship forged between state and non-state actors at the checkpoints.

Often we find cases in which the exercise of checkpoint control is based on tacit competition as well as co-operation between border gatekeepers and brokers. The involvement of both state and non-state actors in border governance echoes with existing scholarly insights that state agents are embedded in the trans-border brokerage system. Put differently, a checkpoint is where state power meets the informal economy. Brokers rely on colluding state gatekeepers for preferential passage and information on border control. In return, gatekeeping officials count on brokers for the co-ordination of movements through the checkpoints in an orderly manner. It is a delicate symbiotic relationship, characterised by periodic tensions and conflicts, leading to a kind of “border games” or “collaborative scheme” (Andreas 2000).

In this collaborative regime, shadow exchanges involve not only transactions among buyers, suppliers and traders, but also transactions between traders and state actors in negotiating border crossing. “Crossing fees” range from cultural tributes in the form of gifts to institutionalised payments to checkpoint authorities. Studies have found that in Mondulkiri in the south-eastern part of Cambodia, rents extracted at local checkpoints are siphoned to the higher hierarchy, and even to the ruling party to fund its political activities (Milne 2015). In her article in this issue Elsing (2019) reminds us that a differentiation between gifts, tributes, and bribes is needed when examining the varieties of border transactions.

Conclusion

This introduction has highlighted the diversity and complexity of cross-border shadow exchanges in Asia and beyond. To move beyond our shadowy understanding of this opaque but significant activity, we need to link up several hitherto separate fields of inquiry in the study of borders, informal/shadow economy, and transnational exchanges. We further underline the key role of checkpoint politics as the fulcrum of cross-border exchanges. It shapes the ways cross-border movements are organised; it is a major arena where multiple state and non-state actors collide and collude; it links informal operations to state-sanctioned activities; and it regulates the selective porousness of state borders. As such, the study of cross-border shadow exchanges will remain incomplete without a close investigation of checkpoint politics.

To a certain extent, checkpoints serve as the safety valve in maintaining a “soft” border. A soft border is beneficial to both the state and the border-crossers. On the one hand, the state has limited effectiveness in enforcing a hard border. Maintaining a soft border allows the state to retain a symbolic presence of sovereign power. On the other hand, border-crossers need a porous checkpoint border to negotiate wealth allocation. Neither the maintenance of a hard border nor the abolition of border control will meet their interests. Kalir and Sur (2012) remind us that the proliferation of illicit cross-border movements should not be seen as a failure of the state. Instead, they see it as part of the ongoing practical negotiations to establish social order.

Checkpoint politics thus allows different state and social actors to engage in constructing, manipulating and undermining borders. In the words of Konrad (2015, 11), the motion along surrounding borders “generates, aligns, sustains and alters borders in dichotomy and dialectic.” In other words, it is the active agency of various social actors in the construction of political, discursive, symbolic and material orders that underlines the transformation of border space. Such agency actively constitutes, sustains or modifies borders. Rumford (2012) further reminds us to look beyond people who take advantage of the border opportunity in trafficking, smuggling, parallel trading and so on. These actors undermine border control but they do not seek to dismantle or construct borders anew. However, there are also actors who seek to make borders or to reconstruct the nature of borders. For instance, border town inhabitants and activists in Hong Kong have strongly protested against the ineffectiveness of border control that allows parallel traders to flood the border crossing (Laidler and Lee 2015, 320–322). They have shared similar efforts and sentiments of many Hong Kong residents to maintain and even fortify the sub-national border separating the Hong Kong Special Administrative Region from the rest of China.

Finally, the increasing fluidity of borders means that conventional checkpoints are undermined by cross-border movements of goods and services through e-platforms, mailing services and virtual banking. The geo-physical limit of state boundaries may have rendered physical checkpoints increasingly obsolete. As Vukov and Sheller (2013, 225) put it, border checkpoints have transformed from static demarcations towards more sophisticated, flexible and mobile devices of tracking, filtration and exclusion. This is made possible by the availability of new technologies of biometric tracking and surveillance. As such, new forms of checkpoints have emerged in cyber space and the digital media. New gatekeepers and brokers such as banks, transport operators, internet servers, digital data centres, and so on have been incorporated into checkpoint politics. In terms used by Côté-Boucher, Infantino, and Salter (2014, 196), the gatekeeping functions have migrated away from geo-physical boundaries to dispersed and heterogeneous sites beyond border lines. These developments are beyond the scope of this special issue, but their rise signifies the changing landscape of checkpoint politics and the fluidity and flexibility of the informal economy in global exchanges.

Disclosure Statement

No potential conflict of interest was reported by the authors.

Additional information

Funding

This work was supported by Research Grants Council, Hong Kong (Project reference: UGC/FDS12(14)/H02/14 and UGC/FDS14/H09/17, respectively).