Movement of funds cross-border out of mainland China – including via digital currencies – is helping to fuel transfer of at least CNY1 trillion (US$146.5 billion) for gambling each year, claimed an official of China’s Ministry of Public Security, speaking at an event in Beijing.
Liao Jinrong, the director general of the international cooperation department at the ministry, was cited by the Beijing News as suggesting such transfer was a threat to China’s economic security in terms of the influence of “foreign powers”.
The comments were picked up on Friday by the South China Morning Post newspaper.
“There are so many casinos overseas, and details of the assets of many domestic entrepreneurs, individuals and related parties would have been investigated thoroughly [by casino operators]. This is very unsafe for us,” Mr Liao was cited as saying.
The account of Mr Liao’s comments did not mention details on the methods supposedly used for such money flows. But there were mentions – according to South China Morning Post’s report – of criminal gangs helping gamblers to move funds cross-border out of mainland China.
It was not clear from the report whether the official was including money transfers from the mainland to Macau as part of the aggregate. Macau – a special administrative region – is the only place in China where casino gambling is legal.
There have been multiple media reports and commentaries by investment analysts recently – mostly using sources that have not been identified – that have suggested the mainland China authorities have tightened scrutiny and control of funds flowing to Macau, including funds for gambling.
What is clear is that at least one major junket brand in Macau – Suncity Group – has since August altered its redemption rules for cash chips, and “account transfers”. It said so in a statement to GGRAsia.
Zhu Min, head of the National Institute of Financial Research at Tsinghua University in Beijing, was quoted recently by People’s Daily newspaper as saying “the volume and speed of cross-border capital flows are unprecedented,” and that China “must be prepared for potential risks.”
In August, China’s State Administration of Foreign Exchange said it would strengthen its oversight of the foreign exchange market and seek to supress “underground banks” and “cross-border” gambling.
Separately, in a circular published on Saturday, China’s foreign exchange regulator listed 10 cases – dating between 2017 and 2019 – of individual Chinese citizens that had been fined for moving funds either for “cross-border gambling”, or “overseas gambling”.
The total amount of funds said to be involved, was the equivalent of almost US$2.8 million, with the individual amounts ranging from US$102,000, to as much as US$586,000.
Each individual received a fine, with the amount ranging from CNY103,000, up to CNY498,000, said the State Administration of Foreign Exchange.
(Updated, 11.45am, Sept 28)
