Mainland must act on conterfeiting menace
All economies have to contend with counterfeiters. But the problem is even more acute on the mainland because it remains essentially a cash-based economy. As if to highlight its seriousness, some mainland websites have brazenly advertised for sale high-quality bogus yuan notes that can cheat detection machines. Several were still running yesterday.
In a rare move, the mainland's central bank has acted to teach people how to spot fake banknotes. It has released a chart identifying key features that distinguish a real note from a fake one. One reason for the authorities' concerns is that widespread counterfeiting could cause social unrest. There have been reports of poor migrant workers being paid counterfeit notes after months of backbreaking labour. As workers collect wages to take back to their families for the Lunar New Year break, the temptation is there for unscrupulous bosses to pay staff in fake notes during an economic downturn.
The mainland's banking system is still developing. This means most transactions are settled in cash. For employees, counterfeiting therefore presents an additional danger. Migrant workers are most vulnerable as they have to travel long distances and may lose track of former employers. To protect workers and develop more advanced financial services, there is an urgent need to upgrade the nation's banking system to better handle salary payments electronically.
Mainland banks may also be taking inadequate measures. There have been reports of customers being given fake notes from ATM machines. Pan Jun, a senior official with a joint State Council commission, has reportedly complained that many cash detectors made on the mainland are not up to standard. These problems, if they are as bad as reported in some mainland media, must be rectified quickly. A Guangxi farmer was sentenced this week to 10 months in jail for trying to use fake notes to buy jewellery at a shop in Guangzhou. But he is small fry. Instead, authorities should focus on counterfeiters and their distributors. Counterfeiting undermines trust in a nation's currency. It must be contained, if not wiped out.