With its controls over foreign currency, the practice of the illegal exchange thereof in China is decades old. But now, it’s all caught up with some individuals whose ¥200-million scam was operating in Shanghai and beyond, including our very own Jiangsu.
First though, little back story. This correspondent lived in Shanghai from 1993 to 2003. During this time, it was common for foreigners to be approached, particularly near the Bund, by individuals looking to acquire foreign currency.
Usually referred to as the “change-a-money?” guys, on account of their friendly greeting, the idea was was they would give you a better rate for your Dollars, Deutschmarks or Dinar than the bank. Then they simply jacked up the rate and sold the cash on to Chinese, who at the time were prohibited from buying foreign exchange. They were also looking to sell foreigners contraband, but that’s another story.
Most of these guys were small time, but others found they were able to turn such a side business into a major operation. Here in 2022 though, of gang thereof have now been detained by authorities in Shanghai after their illegal foreign-exchange business had over the years managed to rack up ¥200 million in revenue.
The city’s Pudong police found that the main suspect, a Mr. Cai, had been thought to be operating an illegal foreign-exchange ring and making huge profits. Cai was central to what police dubbed “foreign exchange banks”.
It emerged that Cai, who on paper runs a handicraft workshop, was previously engaged in garment processing. In order to expand his business, he would also sell clothes made in China to overseas, reported The Paper this morning, 24 October.
As he conducted more foreign trade, Cai gradually became familiar with some foreign-currency exchange procedures. But he was also becoming unsatisfied with merely producing clothes.
Soon, he was looking for overseas Chinese in urgent need of foreign exchange, together with merchants engaged in foreign trade that he knew, in order to put two and two together and solve the problem.
Investigators found that Cai had in fact been engaged in illegal-exchange business in several Chinese provinces, including Guangxi, Jiangsu, Zhejiang and others.
On 14 September, law enforcement officers travelled to Jiangsu, among other places, to arrest those suspected of being involved in the case. They made a successful capture of 11 individuals, including Cai himself. The investigations are ongoing.
