Wen: Illegal money flows a threat

Illegal capital flows threaten the country's financial system, said Premier Wen Jiabao at a conference in Singapore, according to the Financial Times. "There are a lot of abnormal factors, including underground banking, illegal fund inflows and outflows," he said. His remarks followed the revelation that state-owned oil groups Sinopec and CNPC had used an illegal banking operation to pay bills owed to companies in Hong Kong. The illegal outfit purportedly specialized in transferring money between Hong Kong and Shenzhen in neighboring Guangzhou province. Sinopec and CNPC did not comment. Wen said half of China's cross-border capital flows occurred in Shenzhen, but that the government would not let banks there limit customer withdrawals. Banks in the city have nevertheless limited withdrawals at times in an attempt to hinder illegal cross-border money flows.