China is no money-laundering hub
- By Wan Zhe
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E-mail China.org.cn, April 9, 2016
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A teller counts money in a bank in Ganyu county, eastern Jiangsu province. [Photo/China Daily] |
The American Associated Press has claimed that China "is emerging as a global hub for money-laundering."
The fact is that global money laundering amounted to US$1.07 trillion in 2011, and US$521.29 billion of this amount was contributed through the United States – in other words, half the world's total.
Money laundering is always mixed up with tax fraud, financial crimes, abuse of the financial system and the financing of terrorism.
Statistics from the International Monetary Fund (IMF) illustrate that global money laundering accounted for 2 percent of the world's GDP in 1996, rising to 5 percent in 2009.
Are there money laundering activities in China?
The answer is definitely yes. China is now the world's second largest economy, and money laundering has become one of the major economic risks it faces.
However, it is hard to measure the scale. In fact, many documents regarding the effect of money laundering are based on speculation and lack an empirical basis.
According to a study by Southwest Jiaotong University, the illicit capital transactions in China totaled US$3.72 billion in 2000 and rose to US$56.82 billion in 2011, of which the outflow amounted to US$3.64 billion in 2000 and US$53.88 billion in 2011. The total outflow amounted to US$215.73 billion during this period, with 67.18 percent going to 25 identifiable regions and countries involving Macao, Taiwan, Japan and Luxemburg.
Does China care about money laundering?
Of course it does. Statistics show that nearly 98 percent of the amount involved in money laundering in 2000 flowed out of the country. The figure was nearly 95 percent in 2011.
At the same time, the illicit capital flowing into China was US$276 million in 2000, accounting for less than 7 percent of the total amount being laundered, and US$1.58 billion in 2011, less than 3 percent of the total.
The huge "outflow" basically illustrates the fact that China is being robbed. Such illicit transactions are a hidden danger to China's economic development, financial stability and social harmony.
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