CCTV has broadcast a special feature accusing the Bank of China of illegally helping customers move money out of the country and helping transfer it into foreign currency (effectively, money laundering), reports the Wall Street Journal.
The laws are strict on this in China, and the government only allows an annual outflow of 50,000 USD per individual and official approval is required for companies to exchange RMB into foreign currency. The accusations are considerable as the bank is state-owned and one of the primary regulators of the flow of RMB out of the country.
According to the Global Times, a Bank of China staff member told CCTV reporters: “No matter where our client’s money is from and where it goes, we can help them get it out…to put it simply, we help launder your money.”
If the allegations that a state-run bank are conducting this type of illegal activity are proved true, punishment is likely to prove severe, particularly during a time when the Party is in the midst of a strong drive against corruption. The Bank of China, however, has denied any wrongdoing.
In many countries a media company exposing the corrupt practices of a major bank would be par for the course, but this is unusual as it it is effectively two very powerful arms of the government openly attacking each other.
CCTV has built something of a reputation reporting on the foibles and flaws of foreign companies importing products into China, but it is very unusual that they openly criticize state-run enterprises, let alone one of the go-to financiers of government projects and policies.
In search for reasons why this is happening, Xi Jinping’s much publicized anti-corruption drive seems a good place to start. Officially, China condemns the practices of naked officials, those government employees who move their ill-gotten gains abroad (and often their families too) to incubate them from uncertainties lying back home. Sending money abroad not only reveals a lack of faith in the system on the part its representatives, but also it may be significantly detrimental to the slowing of the Chinese economy, which is hemorrhaging large sums of cash to the US, Canada, and Australia.
And so, this form of graft is currently falling under the hammer of President Xi’s strong anti-corruption campaign. Obviously, an effective method of doing this is to stop its enablers, which in this case appears to be the Bank of China. What is less obvious is why this is being done in such public a setting as the nightly news: an attempt at transparency, one might suppose.
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