China's central bank said suspected cases of money laundering jumped 12-fold to 387 billion yuan (US$52 billion) last year as measures to monitor currency flows in the economy were tightened.

 

Police resolved more than 100 of 1,239 cases referred to them, involving 40 billion yuan, the People's Bank of China said in a report posted on its Website on Monday. In 2005, the central bank reported 32.8 billion yuan of suspect transactions to police, Bloomberg News said.

 

The jump in suspicious movements reflects China's efforts to prevent money laundering from undermining an economy that grew 11.5 percent in the first nine months of this year. The government is cleaning up the banking industry after spending almost US$500 billion bailing out the nation's four biggest state-owned lenders hurt by bad loans, according to an estimate by Moody's Investors Service.

 

"China is improving its monitoring system," said Qu Qing, an analyst at Shenyin Wanguo Research and Consulting Co in Shanghai. "Better monitoring means more money laundering can be detected."

 

Ten foreign lenders were among 662 banks fined a total of 40.5 million yuan for violating money laundering rules last year, the central bank said.

 

The central bank said it took enforcement action against more than 70 underground money exchange and laundering units involving US$3 billion in 2006.

 

The number of "suspicious" foreign currency transactions reported to the central bank rose 112 percent to 4.22 million from a year earlier, it said, without giving a value.

 

The places with suspected money laundering included Shanghai and Shandong, Guangdong and Yunnan provinces, it said.

 

(Shanghai Daily November 7, 2007)