Campaign shuts down currency syndicates
The central government has shut down 155 illegal foreign exchange trading and money laundering syndicates involving transactions of 12.5 billion yuan during a nine-month campaign.
In a joint press conference yesterday, the Ministry of Public Security, the People's Bank of China and the State Administration of Foreign Exchange (Safe) said they meted out 19.43 million yuan in fines and confiscated 110 million yuan worth of currencies in a push that ended last December.
'The joint efforts of the three departments have effectively tackled these illegal activities which negatively affected banks' normal operations, led to a loss of foreign exchange, distorted our international foreign-exchange trading statistics and facilitated corruption, smuggling and drug-trafficking,' said Zhang Jing, deputy director of the Ministry of Public Security's economic crimes bureau.
Highlights included the arrest last September of Taiwanese businessman Li Kuide and five others who allegedly set up a property development company in Hainan to trade Taiwanese, Hong Kong and US dollars and yuan.
Since 1998, his company allegedly illegally traded 520 million yuan worth of foreign currencies by asking clients to deposit yuan into a mainland bank account and transferring an equivalent in foreign exchange into the customers' accounts.
Another case, involving 3 billion yuan in total, saw five suspects from Xinjiang apprehended in June. They allegedly bought US dollars in Xinjiang and Zhejiang and sold them to Xinjiang trading companies, which claimed value-added tax rebates and subsidies on bogus foreign trade transactions.
Separately, Safe's Administration and Inspection Department director, Xu Mangang , said China continued to enjoy huge surpluses in both current accounts and capital accounts last year.
The current account tracks trade in goods and services, while the capital account keeps tabs on remittance and investment inflows and outflows.
'China's international balance of payments has been in positive territory since 2001 and the surpluses are growing year by year,' Mr Xu said. He would not say whether the influx of 'hot money' betting that the yuan would appreciate had contributed.
