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Worries over China's economic slowdown and possible interest
rate rises by the U.S. Federal Reserve have led to a wave of
capital outflows this year.
Chinese law prohibits individuals from transferring more than
$50,000 out of the country per year, but the underground banking
industry has thrived in recent years as a channel to send money
out of China.
"Some 'grey funds' have been transferred through underground
money shops across the border, which not only poses a serious
risk to our foreign exchange management but also disturbs the
order of financial and capital markets and threatens our
financial safety," Vice Minister Meng Qingfeng was quoted as
saying on the Ministry of Public Security website.
In April, a similar campaign found 66 underground banks
responsible for illegally funneling out more than 430 billion
yuan ($67.5 billion), the ministry said.
(Story refiles to correct spelling error in first line, and
attributes Vice Minister Meng's comments in the 4th paragraph to
the Ministry of Public Security's website.)
(Reporting By Xiaoyi Shao and Koh Gui Qing; Editing by Eric
Meijer)
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