China has uncovered nearly US$10 billion worth of falsified trade transactions after crackdown began last year, the nation’s currency regulator said on Thursday.
Wu Ruilin, deputy director of the supervision and inspection department of the State Administration of Foreign Exchange (SAFE), said the regulator launched a campaign to curb fraudulent trade financing in April of last year in 13 provinces and cities.
This year, the effort was expanded to 24 provinces and cities, including Qingdao, he said, according to the Wall Street Journal.
So far, SAFE has discovered trade fraud of nearly US$10 billion throughout the country and has handed more than 15 cases over to police, Wu was quoted as saying.
“Trade-financing fraud is very harmful not only to trade but also to the overall economy,” he said. “It increases the pressure of hot money inflows and has even become the channel through which funds of some criminal activities flow in and out of China.”
Some banks have failed to fulfill their duty to check on the authenticity of the traders’ documents, Wu said, according to the report.
The remarks mark the most extensive official comments yet on problems in trade finance in China since a scandal involving metal supplies in the port cities of Qingdao and Penglai, the Journal noted.
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