China’s forex new year resolution: hit illegal currency outflows hard in 2018
Foreign exchange regulator promises to tackle underground banks in the interest of national security
China will step up its crackdown on foreign currency crimes, including underground banking, to safeguard “national economic and financial security”.
The State Administration of Foreign Exchange said on Monday that it worked with police to raid roughly 100 underground banks involving “hundreds of billions of yuan” and arrested more than 100 suspects last year.
This year the foreign currency regulator would wage the campaign with “even greater enthusiasm” to punish operators and clients of underground banks helping Chinese move their money overseas. It would also clamp down on illegal activities under the guise of “innovation”.
The announcement suggests that there is unlikely to be any relaxation in China’s draconian capital account controls, even though the yuan has strengthened to a two-year high against the US dollar.
From January 1, account holders can withdraw a maximum of 100,000 yuan (US$15,000) a year in total overseas from their Chinese bank accounts, rather than the previous 100,000 yuan allowable from each account.
