Australian real estate center in Chinese money laundering racket

A crackdown of money laundering in China is expected after the predominant state owned CCTV (China Central Television) aired undercover footage showing the Bank of China offers these services for a fee during a 20 minute bulletin.

A Business Spectator article republished in The Australian reports:

“We don’t care where your money is from or how you earn it, we can help you get it out of the country,” a Bank of China employee told CCTV. “We don’t care how black your money is or how dirty it is, we will find ways to launder it and shift it overseas for you,” according to a detailed CCTV investigative report.

China allows a maximum of $US50,000 to be sent off shore per year – simply not enough to snap up a bargain in Australia’s residential property bubble. Therefore investors need to go to a branch of the Bank of China who will help these citizens launder their money out of China. The scheme is marketed as ‘You Huitong’ translated as You Uncapped. According to the story, Bank of China staff colludes with Chinese immigration staff to disguise the origin of the funds.

According to the Business Spectator:

A senior manager with one of the big four Australian banks told the CCTV reporters that the Bank of China was crucial to the bank’s migration business.

“The money is very safe and will leave the country in a very grey channel. The Bank of China is the same as an underground bank [a Chinese term for black market operators that launder money],” he told CCTV.

He said the Bank of China has a huge business network abroad and only the Bank of China could carry out operations on such a large scale.

According to the CCTV bulletin, one sub-branch of the Bank of China in Guangdong – alone – has sent $970 million USD abroad this year.

But some Chinese do it alone, without the help of the Bank of China. The Sydney Morning Herald reports today that Brisbane Customs have intercepted two Chinese women arriving from mainland China with a suitcase full of $155,000 in US and Chinese currency.

A NAB survey released today shows the share of foreign buyers purchasing established Australian property fell to 10.2 per cent in the June quarter down from 13.9 per cent in the March quarter and the weakest in two years. Any imminent crack down by the Chinese government could have significant effects to foreign demand for Australian property in the months coming.

» CCTV Accuses BOC of Money Laundering – CRIEnglish, 9th July 2014.
» Australia’s SIV scheme a target for money laundering – The Australian, 9th July 2014.
» Chinese ‘washing cash’ in Australia – The Australian, 10th July 2014.
» Bank of China denies money laundering allegations – The Australian, 10th July 2014.
» Brisbane customs officials uncover $155k in luggage – The Sydney Morning Herald, 10th July 2014.
» Foreign demand for property easing, NAB survey shows – The Australian, 10th July 2014.


  1. I’m sure it won’t be long before our cash strapped government target these non voting foreign property speculators with a vast array of taxes and fees, similar to the new tax introduced in France where a value tax of 40% is applied to all unoccupied investment properties.

  2. Weeks ago, I wrote that money from China into OZ housing market is dirty. The RE agents help money laundry for commissions. But Chinese government is not stupid and consequently the emergency shots from China unreliable to keep the OZ property bubble from collapsing.

  3. So I could miss a minor bank interest earning on my tax return and am guaranteed to be prosecuted by the tax office if I don’t pay up, yet billions roll in from dirty, corrupt pricks overseas and we turn a blind eye! Hopefully our relationship with China sours enough that they start pulling this money, or better still we confiscate it through taxes.

    Both cases are better than the status quo where they effectively keep printing, acquire more of our hard assets and inflate the hell out of our economy like they have been. Dollar keeps rising, manufacturing crumbles, we slowly lose ownership of our own food bowl and mines, whilst the population can’t afford to put a roof over itself. From a financial terrorism point of view it’s brilliant.

  4. Do you think our government is implicated in this or am I just cynical?

    We have this House Standing Committee on Economics stage show investigating foreign investment in real estate. They call the ABS, look mate, we have no idea – we read the daily tabloids to try to grasp what is happening.

    Likewise the FIRB, see no evil, hear no evil, speak no evil.

    Now our big four banks get named in money laundering, and the NAB reports foreign investors buying our real estate to 1 decimal place?

    I’ll bet in the next six months it will be reviled the FIRB is working with[for] the Bank of China.

  5. Anything (even dirty money) to keep the property bubble expanding as none of our slime-ball politicians want to be the ones on post when it finally implodes. They are going to try very hard to make it some other buggers problem.

  6. In the meantime while the FIRB is looking the other way the Chinese organised crime syndicates are moving millions into Oz to set up new branches here. I guess we have now become a really big Chinese Laundry! (Pse excuse the pun)

  7. Pete@7, what’s in it for these pollies? ‘Open for business’? Are they on the take from foreign entities like Rudd was?

    ‘The Labor Party will refund an allegedly illegal $200,000 donation that was used to fund polling in former prime minister Kevin Rudd’s Queensland seat during last year’s federal election, according to a report.

    The donation was allegedly paid to Labor’s Griffith branch bank account by Taiwan developer and former banker Kung Chin Yuan on September 3, The Australian reports.’

    Read more:

  8. I find the fuss with Chinese investment in Australia’s property market as hypocritical especially from those who are complaining they are driving property prices upwards here. Property prices has been going through the roof since the late 90’s and very few complained about it from then. The majority of us liked it when our properties-home, land, investments etc. gained, at unsustainable levels, in value, but now here comes the Chinese to lay the blame for all of it. Being an Australian of European background I support the Chinese efforts. They are obeying what the same Labor/Liberal government monopoly has allowed them to do. We should lay the blame on the same governments who have left the loopholes, vague tax and foreign investment laws untouched and even encouraged them, rather than a particular people who are coming to this country and simply obeying these rules.

  9. The problem with the Chinese rush to park their money here is that it will flow out just as fast as it came in. The effect will be to accelerate the property downturn as they all head for the doors at the same time. We saw this happen with Japanese investments in the 90’s. The Gold Coast suffered badly and still has derelict buildings abandoned by Japanese owners who could not sell before the crash.

  10. @ THEO
    Meanwhile myself (gen y) and many others cannot realistically afford to pay $400k for a home when interest rates are at a historic low level.

  11. Oh and another food for thought comment. All this, illegal money laundering coming to Australia, where is Australia’s government to ask for proof and investigate as to where are all these millions coming from? Are they proceeds from drug crimes and other criminal activity or not? I know travelling to most countries today, including Australia, I am always asked if I have more than $10,000 in equivalent currency and the reason being that they are not proceeds from crime. Maybe we should ask the labor/Liberal government monopoly the question as to why are they turning a blind eye to this?

  12. @ Theo
    The police are aware of the problem with occasional raids on massage (rub & tug shops) and nail parlours most of which are run by illegal workers on student visas. These businesses operate on cash only basis (No credit cards) hence pay little or no tax and sub standard wages. This of course kills all legit competitors and opens the doors to further laundering of proceeds of crime through small businesses.

  13. “A NAB survey released today shows the share of foreign buyers purchasing established Australian property fell to 10.2 per cent…”

    I would love to see the rate for Sydney, regionally broken up. Admin, do such stats exist, or only national stats? I think they would be scary (if they are accurate).

  14. Research discussion paper released today (Monday, July 14 2014)

    In its conclusion, it says… quote…

    “Real house prices have increased at an average annual rate of slightly less than 2½ per cent since 1955.”

    I’m no economist but I’m gonna guess that a big chunk of that averaged 2.5% increase happened in the last 15 years.


    We are all wrong, there is no bubble, never was, and we are just a bunch of incompetent idiots who are whinging coz we can’t make enough money (100k+).

    If they will pay 2 resident economists to write a 50 page document that pretty much says there is no bubble, and that prices have only increased 2.5% per annum since 1955… they are pretty set on maintaining their position on the matter, and I’m fairly certain I am better off extinguishing any hope of home ownership or return to Australia.

  15. I am increasingly annoyed about paying steep Australian tax and being priced out for a bloody first home from whoever is buying. The stupid so called first home buyer grant is really helping the construction co instead of true home buyer. Stupid negative gearing policy is another legend. Whoever introduced that policy should’ve been killed.

    The old day where oz is a good place to live doesn’t exist anymore. Everything is bloody exp, might as well move to US or Canada.

  16. Only 2.5% “real” means in excess of inflation. For 60 years even at simple interest that is 150%.

Comments are closed.