China busts 380 'underground banks' in 2016

China’s police authority said it busted more than 380 “underground banks” last year, involving over 900 billion yuan (US$131 billion) as the authorities attempt to stem an exodus of cash flowing out of the country. The Ministry of Public Security said in a statement on its website on Sunday that more than 800 suspects involved in money laundering were arrested and it found that illegal banking operations were “rampant” across the country, helped by the emergence of internet finance and new online payment methods. According to the South China Morning Post, China is facing huge pressure from capital outflows as investors attempt to move their cash overseas, sometimes illegally, as the yuan’s exchange rate has been weakening against the US dollar. The country’s foreign exchange reserves have shrunk by US$1 trillion from a peak in June 2014.