Chinese authorities have launched a campaign to crack down on illicit money outflows as billions of dollars in capital flight threatens China’s foreign currency reserves. According to the state-run Beijing News, the action, called Operation Silver Eagle II, targets so-called underground money shops, as the laundering operations are known.
Meng Qingfeng, deputy head of China’s Public Security Bureau, said at an Aug. 24 teleconference that the money shops had become an important channel of illicit money outflow for various economic crimes.
Though individual transactions may be minor, the cash traded by illicit banks adds up. As of Aug. 26, 66 rings have been caught by the authorities, the Beijing Times reported. They were found to have been responsible for over $67 billion that left the country. The time period for this flight was not specified.
That figure itself, however, is just a fraction of the over $1 trillion that Global Financial Integrity, an American think tank, estimates was illegally carted out of China between 2003 and 2012.
Early this month, Operation Silver Eagle II targeted over 30 illicit banks in Beijing, Shanghai, Liaoning Province, and along the affluent southern Chinese coast, according to the Beijing Times. Police indicated that many of the cases involved money transfers by corrupt ex-officials living in overseas exile.
