China Money Laundering: Wealthy Chinese Transfer Assets Overseas by Buying Art

According to CNN and other media reports, rich Chinese have now found a more secure way to transfer their assets overseas—through purchasing priceless artworks and playing the art market. (Adrian Hillman / 123rf)
According to CNN and other media reports, rich Chinese have now found a more secure way to transfer their assets overseas—through purchasing priceless artworks and playing the art market. (Adrian Hillman / 123rf)

There are many ways wealthy Chinese transfer assets overseas as part of China money laudering activities. According to CNN and other media reports, rich Chinese have now found a more secure way to transfer their assets overseas—through purchasing priceless artworks and playing the art market. This is how it works. In one method, a wealthy Chinese person buys an expensive artwork in China, and then sells it to someone overseas for a huge profit. The difference between his purchasing price and selling price will be the amount of money he wants to transfer out of China.

Another method is when a rich man buys a piece of artwork in a foreign country for an astronomical price, but he has a collaborator outside of China. After the deal is done, the collaborator takes his commission and deposits the rest of money in the buyer’s offshore account. This is practically foolproof.

The reason why this method work so effectively is mainly because the value of any artwork is hard to set—it’s worth as much as a buyer is willing to pay. The regulatory commission has a difficult time accusing the buyer for paying too much, and thus it works effortlessly.

Prior to this, rich Chinese bought huge mansions, or laundered their money through underground banks. Statistics show that in 2011, wealthy Chinese transferred US$458.3 billion in assets overseas, while Chinese spent $5 billion purchasing mansions overseas in 2012 alone.

 

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