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China Cracks Down on Counterfeiting Dens
By Richard Giedroyc

Opium dens may be old news in the People's Republic of China, but counterfeit money dens are not.

The Chinese government may be turning a blind eye to counterfeit merchandise made in China and being sold in other parts of the world, but the Chinese government has had enough of those enterprising individuals who would counterfeit China's own money. On Jan. 20 the Ministry of Public Security launched a national campaign called Action 09 to shut down what the April 1 issue of the publication China Review called counterfeiting dens.

Current Chinese coins have so little purchasing power that it is bank notes that appear to be the current target of counterfeiters. The police have been busy. As of April 1 it was reported five counterfeiting "dens" had been raided resulting in the arrest of 613 people. The bogus money seized amounted to about 178 million yuan, which is about $26 million US at current exchange rates.

An announcement made April 1 by the Ministry of Public Security indicated a major counterfeiting ring had been raided in southern Guangdong Province. Counterfeit notes with a face value of nearly 100 million yuan were seized, with 13 suspects being arrested.

Other successful recent raids included the confiscation of 13.68 million bogus yuan in southwestern Chongqing Municipality, and the arrest of 11 people in Luohe in central Henan Province. Another 2 million yuan were seized in the Luohe raid.

Yes, it is ironic that while China appears to almost condone knock off products and counterfeits of other people's merchandise it has found there is now a cottage industry of people willing to counterfeit their own money. For those who like conspiracy theories, there is a strong indication the counterfeiting of China's own currency may not be isolated counterfeiting dens, but that some of them could linked.

Beginning in late 2008 fake 100-yuan bank notes starting with the serial number HD90 began appearing in 10 provinces and regions, including Fujian, Guangdong, and Zhejiang. Additional bogus notes began appearing in the provinces of Haikou and in southern Hainan with serial numbers beginning with TJ38.

In a further irony it was realized about the time Action 09 was launched that China's typical low quality money detectors were failing to identify the proliferating counterfeit bank notes. Since that time the ministry has ordered local police "to maintain the crackdown on fake money to safeguard national financial order and the public interests."

This includes rewards of as high as 300,000 yuan, presumably in genuine notes, to anyone providing leads that lead to the demise of counterfeiting rings. In one of those ominous warnings that can be expected in the PRC, police have also been told to crack down not only on those producing and selling these bad notes, but on anyone spending them as well. While in the United States if you should spend a counterfeit bank note by accident the most you might have to face would be confiscation of the note followed by a possible interview by the Secret Service. In China spending such a note might lead to your arrest regardless of your knowledge of the authenticity of the note.

China currently uses coins in denominations of 1 and 5 jiao as well as 1 yuan. Bank notes are issued in denominations as high as 100 yuan, with additional denominations having been recently proposed.

 



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