Editor’s note: If you think foreigners are the only ones to get scammed in China, think again. This article, translated from xinhuanet.com, tells the story of a number of Chinese people engaged in the underground currency exchange business in Beijing who recently felt the painful sting of being conned out hundreds of thousands of Yuan by a pair of foreigners. While the story is interesting enough, the real gem behind this story is the subtle glimpse it provides into China’s illegal foreign exchange trade – a thriving sector run by individuals with “offices” in some of the most random places imaginable.  Back rooms in supermarkets and stores, even stalls at markets as this article points out, can be gateways to a black market underworld you never knew existed.   

On November 13 at 5:00 pm, two foreign men entered Beijing’s Yashow Market shopping center looking to exchange money. They stopped at booth 2015 on the market’s second floor and asked a clerk in English to exchange foreign currency. The clerk pointed the two men to a neighbouring stall ran by Xiao Zhang. Zhang often helped foreigners exchange foreign currency by acting as an intermediary. The clerk introduced the two men to Xiao Zhang, therefore introducing them to the “underground money exchange” market present in the shopping center.

Zhang said in an interview yesterday that after he learned of the two foreigners wishing to exchange thousands of Euros, he quickly called a “Big Beauty” who specialised in foreign exchange. “Big Beauty” is also known as Chen Zhanhua. Chen is the one to go to for underground currency exchange at Yashow Market.

Soon after the call, Chen arrived at Yashow Market. “The two foreigners looked to be European; they were about one meter eight or nine. They were on the heavier side. They flashed about 200 Euros but said they had a lot more to exchange. They said that they wanted to exchange 50,000 Euros,” she said. Chen did not have enough cash on her person to go through with the exchange: she only had 230,000 Yuan. Chen decided to call her old friends Mr. and Mr. Jiang, a couple that worked in the underground currency exchange, in order to help her out with the trade. 

Chen Zhanhua said that that day, the bank exchange rate against the euro was 7.35. The rate that she used was 7.38. She converted 30,000 of the foreigners’ Euros and gave them 219,000 Yuan while the Jiangs converted 20,000 Euros and gave the men 150,000 Yuan. Zhang was given a 6000 Yuan finder’s fee from the transaction.

Chen Zhanhua told us that she has been engaged in the “foreign currency exchange business” for about eight years. She said that she originally planned to work with tour guides to sell at a 7.66 exchange rate. You can earn several thousand RMB this way, she noted.

Counterfeit bills fool veteran cash trader

After the completed transactions, the two foreigners told Chen that they had another 30,000 Euros that they wanted to exchange. “They said that they would go get the money and come back in an hour to continue trading. But they never came back and the phone number that they left was disconnected.” The next day Chen went to the bank and found out that the Euros were all counterfeit. “Mr. Jiang was also given fake counterfeit money,” said Chen. “I looked over the money carefully in good light. It turns out that I had been careless.” She said that the fake money is very realistic and has the correct watermarks and other markers. It even has the marks for Braille. “A colleague of mine at Yashow had a device to check counterfeit bills. However, at the time the bills looked genuine to me and I did not think to borrow it.”

This is not the first time someone has tried to cheat Chen. In her time in the underground currency exchange business there was another incident in which someone had attempted to give her fake 20 and 50 bills. However, she was able to quickly realize the bills were fake.

After the incident with the counterfeit Euros, Chen went straight to the Sanlitun police station to report the men. “I might be punished as well, but I have to help catch these two crooks. I do not want to let them lie to anyone else.” The Chaoyang police have opened a case against the two men.

“Illegal private reselling of foreign currency.”

Chen said that she is aware that her private currency exchange business is illegal. However, she told police that she is willing to accept legal action against her.

According to Article 45 of the “People’s Republic of China Foreign Exchange Management Regulations”, unauthorized trading, posing as Forex traders, and other illegal foreign currency exchanges are punishable by a warning and the confiscation of one’s illegal income as well as a fine of 30 percent or more of one’s illegal income. Illegal currency exchange is seen as a crime and those who are involved are held criminally responsible for their actions.

Zhang Ziwei of Beijing’s Bai Rui law firm said that Chen Zhenhua is now suspected of reselling illegal foreign currency as a private business. If the two foreigners are found, the money that they cheated Chen Zhenhua out of may be confiscated in accordance with Chinese law.

Source: xinhuanet.com

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Keywords: underground currency exchange China’s foreign exchange underground foreigners in Beijing