A recent article in South China Morning Post reveals the ways that Chinese citizens are moving money out of the country, amidst a sustained devaluation of the yuan and unstable economic conditions. The amount of funds making their way out of the country is staggering, as a State Administration of Foreign Exchange report reveals that five major companies forged contracts and invoices to transfer a combined $226 million USD offshore in just the past two years alone. Popular ways to move funds include forging documents such as invoices and trade records or using invoices multiple times, pushing funds to underground banks or transferring money, using invalid custom forms and more.
Though new rules and regulations to combat the outflow of money from China went into effect July 1st, experts say movement is “likely to remain strong for years to come, with companies and individuals looking for better investment opportunities while safeguarding their money.” As Li Youhuan of the Guangdong Academy of Social Sciences adds, “China will need to depreciate the currency in 2018 to reduce the pressure on capital flows” if it expects to lessen the outbound investment and increase the country’s foreign reserves.
See article, CHINA TRIES TO STOP MONEY FROM LEAVING THE COUNTRY