China: 800 held in bank­ing crack­down

Northwest Arkansas Democrat-Gazette - - BUSINESS & FARM -

BEI­JING — More than 800 peo­ple have been ar­rested in a crack­down on un­li­censed bank­ing oper­a­tions as Bei­jing tries to stem out­flows of money from the coun­try, the po­lice min­istry said Mon­day.

More than 380 un­der­ground banks that han­dled trans­ac­tions to­tal­ing more than 900 bil­lion yuan [about $130 bil­lion] were bro­ken up in the crack­down that started last year, ac­cord­ing to the min­istry.

Com­mu­nist lead­ers al­low un­li­censed fi­nanc­ing ac­tiv­ity to sup­port en­trepreneurs but try to stop ac­tiv­ity they say threat­ens the state-run bank­ing sys­tem, sup­ports crime or helps peo­ple vi­o­late for­eign ex­change con­trols or other reg­u­la­tions.

Com­pa­nies and small in­vestors be­gan shift­ing bil­lions of dol­lars a month out of China in late 2015, prompted by ex­pec­ta­tions the cur­rency would de­cline in value. Bei­jing re­sponded by step­ping up scru­tiny of out­bound in­vest­ment and ban­ning some ac­tiv­i­ties by in­di­vid­ual in­vestors.

The po­lice min­istry state­ment Sun­day gave no de­tails of what those ar­rested were ac­cused of do­ing.

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