The housing sector in Irvine, California is booming, partly as a result of an influx of funding from China. After I ask Chinese language acquaintances the place the cash comes from, they recommend that it’s transferred to the US via mysterious channels.
Commenter Ahmed Fares directed me to a Every day Mail story that sheds mild on one such channel:
First, [Mexican] cartel money-men within the US organize to ship an amount of money with a courier working for the triads, who message their bosses to substantiate when the drop has been made.
As quickly because the message is obtained, Chinese language gangsters switch the identical sum of money in Mexican pesos to the cartels – which they’re then free to spend as they like.
On the similar time, the triads organize for a rich particular person in China to purchase the drug {dollars} by transferring the identical quantity of Chinese language foreign money into accounts the gangsters management.
There’s large demand for this service in China, as the federal government prevents individuals from transferring greater than $50,000 in another country annually in an effort to cease individuals offshoring their wealth.
This will get across the system as a result of the cash by no means strikes throughout a border. The Chinese language foreign money solely strikes between banks in China, and the {dollars} by no means depart the US. . . .
As soon as the rich purchaser has management of the {dollars}, they’re free to spend them as they want inside America – sometimes on faculty tuition or actual property.
The US tries to ban medication, whereas the Chinese language authorities tries to ban giant foreign money outflows. Each sorts of restrictions on freedom have the impact of making black markets. I’d anticipate varied governments to reply with even additional restrictions on freedom. And I anticipate individuals to seek out methods of evading these extra restrictions.
Governments will then reply with even additional restrictions on freedom, and extra black markets will develop.
Rinse and repeat.
PS. The article supplied one other instance of the latest surge in anti-Chinese language bias:
US officers imagine it’s extremely unlikely that such a big quantity of cash could possibly be transferring via Chinese language banks unnoticed by Beijing’s all-seeing bureaucrats, and so purpose they’re both selecting to show a blind eye or are concerned in it.
And but American officers appear to have no hassle believing that huge portions of unlawful cash may transfer via the US monetary system with out the authorities being conscious of it. I ponder why?
The angle of American politicians (of each events) appears to be: “Why doesn’t China repair America’s drug drawback!”
