China State Media Expose Chinese Bank Money Laundering
Recently China Central TV (CCTV) aired a 21-minute report
on Chinese banks that are involved in money laundering.
With the Communist regime refusing to join any international
anti-money laundering organization all this time, why is it
suddenly exposing such behavior of its banks?
Here’s our report.
Yesterday CCTV carried a detailed report of the capital flight
involving banks and immigration agencies involved in
manipulating fraud immigration documents
and bypassing foreign exchange regulations.
The report disclosed that immigration agencies create
fraudulent revenue contracts for the customers,
while the banks launder the money.
For example, the customer first deposits funds in the bank,
and the bank gives them a loan pledged by certificates
of deposit to explain the source of the immigrant’s capital.
It is reported that a growing number of people, especially
officials, transfer assets overseas through this gray channel
The report also says that these banks are playing the role
of the immigration agency for their dedicated customers.
This investment immigration service has become
very thorough and honed, from the type of investment
to the exchange of foreign currency and remittance.
Wang Sixiang, prominent Chinese blogger: “This is certainly not
an autonomous behavior of the media, that much is certain.
Someone behind the scenes has pushed [for this report],
possibly related to some internal struggle, with a certain target.
It is being used as a means, and may not necessarily
have anything to do with opposing money laundering."
In China, foreign currency exchanges are controlled,
and are limited to $50,000 per person annually.
But the CCTV report says the banks bypass this regulation
through a so-called ‘excellent remittance’ service,
which allows transferring of Chinese currency overseas first.
The overseas branch of the Chinese banks will then exchange
the Chinese currency into foreign, to help unlimited foreign
currency exchange for the customers.
However, this ‘excellent remittance’ is a shady business.
It is not available on the official websites of the banks.
Instead, it is discussed only when brought up by customers.
It is an internal service in collaboration
with the immigration agencies.
The Guangzhou Yuexiu Branch is reported
to have conducted the excellent remittance for over a year
and transferred $967 million overseas,
a value that only ranked the fifth among all branches.
Financial market expert Liu Weiming from China CITIC
Bank International was quoted in the report as saying that
the excellent remittance service has caused huge outflow
of capital which is surely to affect the financial system.
Frank Xie, University of South Carolina Aiken
School of Business professor: “The Communist regime
can no longer sustain such capital flight.
In the past few years, the regime’s financial stability has been
hit by the capital outflow caused by wealthy Chinese and
the Chinese officials leaving China with public funds.
The CCTV’s report could lead to the restriction of the outflow
of foreign currencies.
To those who wish to immigrate overseas,
the door has started to close.”
The Chinese banks made a statement in their defense against
CCTV’s allegations via their official websites and social media.
However, these posts were quickly deleted.
Subsequently, Caixin, a website allegedly supported
by Chinese president Xi Jinping, refuted CCTV’s report.
According to CCTV’s report, the state foreign exchange
agency and the anti-money laundering office are stationed
in the Chinese banks, which stopped the remittance business
for a while. However, Caixin said that is not true.
CCTV quoted Ping An Securities chief economist Zhong Wei
as saying that this type of remittance practice
is one that violates the current foreign currency regulations.
Caixin says Zhong Wei has made a statement that he is
deeply disturbed by CCTV’s report out of context.
Writer Sen Ge says that under the imperial regime
of the Chinese Communist Party,
every major move targets someone.
Assuming this is just a precursor, who will be the next?
It is really puzzling.
Interview & Edit/Liu Hui Post-Production