China cracks down on illegal forex trade

BEIJING -- China's foreign exchange regulator said Monday that it had recently uncovered a number of illegal forex trade cases, and vowed to step up market regulation this year.

Authorities discovered an underground bank conducting illegal forex transfers worth nearly 50 billion yuan ($7.3 billion), according to the State Administration of Foreign Exchange (SAFE).

In other cases, companies were found to be evading forex controls by using fake receipts or fabricating trade deals.

Many individuals were suspected of money laundering and transferring assets illegally, moving large amounts of money in small sums to avoid scrutiny, according to the SAFE.

It pledged to get tough on illegal forex trade to maintain the balance of international payments, while promising to make policies more transparent and advance the opening up of financial market.

Weighed on by a weak Chinese yuan against the U.S. dollar, regulators have moved to crack down on illegal cross-border capital flow in the past few months, while reiterating that normal business will not be affected and foreign investment is welcome.

Pan Gongsheng, head of the SAFE, said China's forex market was now relatively stable and that cross-border fund flow were trending towards equilibrium.

"SAFE will provide more convenience for cross-border trade and investment to serve the development of the real economy," he said.