What next for Vancouver, the city awash with too much Chinese money?
- The Canadian seaport was the first place to experience a tidal wave of often-dirty Chinese cash.
- Now it is the first to try and stem the flow.
The black coupe pulled up outside the Starlight Casino in a suburb of Vancouver. The driver got out, greeted a man in a red shirt and pulled two bulging white plastic bags from the boot. He led the way into an empty noodle shop next door, where he handed over the bags before returning to the car. The man in the red shirt took the bags into the casino, through a cavernous glass lobby with signs in English and Mandarin. At a cashier’s desk, he opened one of the bags to present his cargo: thousands of green C$20 bills, bound into loose bricks with yellow plastic bands.
The cashier’s counting machine would need to run continuously for more than 10 minutes to riffle through all the notes, which came to more than C$250,000 (today the equivalent of US$190,000; HK$1.5 million). Converted into chips that could be cashed out later, whether or not they had been wagered at the tables, the money would be spendable anywhere in Canada, unimpeded by questions of provenance.
The transaction at the Starlight on that winter day in 2009, depicted in video footage released this year by the government of British Columbia, was one of thousands made in and around Vancouver over the past decade. Known abroad primarily for its stunning Pacific Coast setting and athletic lifestyle, the city has since become one of the world’s largest sluices for questionable funds moving from Asia into Western economies.
One academic terms the process “the Vancouver model”: a seamy mingling of clean and dirty cash in casinos, property and luxury goods made possible by historical ties to China, and by Canada’s lax record of fighting financial crime.
It is a product of one of the largest financial flows of the 21st century: the money being frenetically shuffled by millions of wealthy Chinese into safe assets abroad, in defiance of their country’s capital controls. Since mid-2014, capital flight from China may have totalled as much as US$800 billion, according to estimates from the Institute of International Finance.
In Vancouver, the tidal wave has wrought a dramatic economic, demographic and physical transformation. Alberni Street, a formerly dowdy downtown thoroughfare, has in the past decade welcomed a two-level Prada boutique with a black marble facade, one of the largest Rolex showrooms in North America, and a 62-storey tower with a five-star Shangri-La hotel. All have Mandarin-speaking staff.