Well, the chinese actually founded the town of Mexacali, the sister town across the border from america's Calexico. They showed up in the late 1800/early 1900's in part looking for work post California's gold rush, in part escaping persecution on the northside federally backed by the chinese exclusion act around that time.
No one knows exactly why/how the tunnels were formed, best guest is that the farmers would partially bury themselves at night to sleep as it was cooler underground, and following that logic they decided to construct whole networks of underground quarters to escape the heat. A situation convenient for when Mexico passed its own set of anti-chinese laws.
Many of the current citizens of Mexacli are unaware of/outright deny the existence of the tunnels - the chinese citizens of mexacli are famously guarded - and Vollmans only has rumour and a first hand account from a citizen who claimed to have watched them come out of the ground 'like rats' during a massive fire in the 70's. Eventually he finds a grocery store operating as a kind of central station to the underground network. The tunnels are now dilapidated but at one time were ornately decorated and contained dorms, casinos, and generalized community centers. Tongs, stateside chinese fraternities often confused with chinese mobs (a conception not always wrong however), were a big presence underground.
The fire, air conditioning, and relaxing racial tension have left the tunnels almost entirely empty since the 70's, but Vollman did manage to find an old man still living down there.