China’s vast hot money triangle flourishes
In an underground mall just a stone’s throw from China’s teeming border with Macau, a row of 30 small shops with identical golden plaques does a brisk, though shadowy trade with mainland Chinese visitors, many of them bound for the gambling hub.business Updated: May 20, 2013 23:49 IST
In an underground mall just a stone’s throw from China’s teeming border with Macau, a row of 30 small shops with identical golden plaques does a brisk, though shadowy trade with mainland Chinese visitors, many of them bound for the gambling hub.
“Good rates. Better than the banks,” shout salespeople jostling to usher clients into shops where thick wads of Chinese 100 yuan ($16.31) and HK$1,000 ($130) bank notes change hands and shuffle noisily through electronic cash-counting machines. Licensed as liquor and dry goods stores with stacked shelves of rice wine and cigarettes, many conduct their real business in back rooms — as underground bankers and remittance agents.
“It’s very simple,” said one agent surnamed Choi, dressed in sandals and ripped jeans. “You give me renminbi here. Then we deliver Hong Kong dollars to you in Macau. We can move tens of millions each day.”
As China’s economy and financial markets mature and gain in sophistication, so too does a vast underground banking industry offering swift, cheap and low risk cross-border fund transfers — shifting hundreds of millions of dollars each day. Much of that activity is conducted openly on the streets of southern China’s Guangdong province, where businesses and individuals depend on underground networks to get around strict currency controls - both for legitimate commercial purposes and to safeguard assets beyond the reach of authorities.