Yeah, they pay in cash up front. I've seen sometimes physical bundles of bills.
The Chinese mob (wink wink) has the biggest money laundering operation in the world. They have brokers who pick up (source) and deliver (destination) the cash. They do all the currency conversion. And then have an internal market to auction the conversions. All over Chinese government controlled networks like WeChat. Very clever.
The Triads have been doing this kind of dark market money transfers for decades (it's mentioned in the book Mr Nice like it was old news in the 80s). I've met Chinese people who use it to send/receive from family and investors in mainland China. I've met agents who investigate the networks of companies Chinese mobsters make to cover up their tracks.
Financial Times doc https://www.youtube.com/watch?v=EjGIp7kdS6E#t=8m32
Dirty money will always exist, and currently exists in every single country. But in the past 20 years, there have been a rise in the amount of rich Chinese. Just like rich Japanese of 80s through their RE investments and etc.
Ironic given that his daughter attended Harvard, which is very pricy on a 2000s-era party salary.
Around that time, the Xi admin began limiting the amount of currency outflow from a single household to around $50-100k a year. That isn't enough for international tuition in most cases in the US, or moving abroad.
As such, anyone who wanted to move or pay tuition in the US began leveraging shadow banks.
There were much less invasive ways to nudge businesses to convert black/grey money into white money but the method the Xi admin began enforcing in the 17-18 period also helped with solidifying control.
Kinda sad tbh because a lot of these reforms are needed, but they became politicized.