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Comment by adaml_623 | Hacker News Reader

I wonder what the billionaires do to get their money out? Do they pay people to travel with jewellery that gets sold for foreign currency once it's outside China? Do they overpay for imported goods and get the difference paid into a Swiss bank account? It's always interesting to me how really wealthy people pay for loopholes

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They send their children overseas to overpriced universities, and are allowed to justify buying luxury cars, and other school related expenses. I don’t think the mentality on these expenses is getting a 1:1 conversion rate, but that money is meant to be spent.

There’s various ways they can fund their children’s business ventures (passion projects) overseas without expecting it to ever turn a profit.

With the nepotism in Asia, it doesn’t really matter what degree the children of the elite gets, but more school is always viewed as favorable, possibly even moreso than practical work experience sometimes. This is why you see a proliferation of masters and graduate programs in the United States that don’t require GRE or standardized exams. Obviously it’s a different story for the employment seeking middle class.

To your point, it’s not uncommon or a bad idea for the student to study the arts or art history degree either.

> They send their children overseas to overpriced universities, and are allowed to justify buying luxury cars, and other school related expenses.

And real estate.

Like that one Chinese student buying a $31M house in Vancouver!

Buy crypto in China, sell it abroad. At least that was one approach. Note if you do it fairly quickly it doesn't matter what the value of the crypto is, just the liquidity.

Another way is 'business' investments in other SE Asian countries, that then get liquidated and moved further abroad. China does a lot of business with S. Korea for example. If you have an export company, and China exports a lot, you can hold a portion of the foreign earnings abroad and just keep them there.

This is certainly much less painful than buying real estate in London, New Zealand, San Francisco, etc!

Or just buy/hold/sell a stable coin like BUSD, USDC, or USDT to minimize your market risk.

Please no comments on how “Tether is a scam”, blah blah blah.

If you're only interested in money laundering USDT is not a bad choice even if it is a scam.

> Buy crypto in China, sell it abroad.

I heard this many times and I can’t figure out how it works. Crypto is sortof banned in China for a while for this reason and yet it’s still a route to take money out of China. But how? Who is going to give you crypto for yen in China?

You buy a large number of ASIC crypto miners in China.

Indeed, I was simplifying perhaps a bit too much. There are ways to arbitrage capital in China into capital abroad via crypto.

Why do you think the crypto industry crashed when that ban started being enforced...

It's officially banned but it's not like they have been banned successfully. You just buy crypto by transfering money P2P to another individual and that individual sends you crypto back. The government has no way of knowing that a crypto transaction has happened.

Singapore, where the trade-to-GDP ratio is 320%. The best way to get money out of China is to ship goods to Singapore at a loss, then sell them on the Europe or the Middle East realizing the profits in Singapore

Look at the port of Singapore. Massive loading and unloading from ships, but no rail or lines of trucks leaving. Look at the hundreds of ships parked offshore waiting to load or unload. Look at the position on a map (every ship heading east from Asia passes Singapore, 2000 merchant ships per day)

https://www.cbc.ca/books/wilful-blindness-1.6136088

Organized Crime in places like Vancouver smuggles drugs into Canada, the funds are laundered in casinos and real estate, and the money is transferred from the Wealthy in China to OC in China, and the wealthy investor gets clean cash and houses in Canada.

Why make it complicated? Macau has casinos. The belt and road initiative into Cambodia also involved casinos, but they're reeling back on that.

Diversity and security of investments.

They launder the Drug Cartels money. Chinese based scheme for capital flight have taken that market by offering low or even zero cut to the cartels.

Because the real client are the chinese individuals needing to get the money out. And they pay the cut.

https://www.reuters.com/article/uk-mexico-china-cartels-spec...

Cryptocurrency have been another big one. There are strong pointers that it is the main driver behind the rise of bitcoin. And possibly tether.

In other places in the past, it was often done by bribing an official to ignore a wire transfer. Today in China? I don't know.

You don't need an official to authorize personal expenditures on an Amex Centurion black card. This is why staff at luxury clothing stores in Venice speak Chinese.

That card stops working pretty quick if you can’t manage to get money out of China and into Amex’s hands.

And that's why people proxy through Hong Kong and own overseas holding companies. Just don't be a thorn to the party.

Didn’t paulsutter above suggest Singapore had replaced HK though?

In Cyprus during capital controls banks allowed high value individuals to withdraw money.

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