China's Economic Model Fuels a Vast Global Underground Crime Network

China's stringent capital controls and surplus industrial capacity have birthed a shadow financial system that underpins a global illicit market estimated at nearly $1 trillion a year. Underground banks and shell companies enable the purchase of sanctioned Iranian oil, the conversion of stolen North Korean cryptocurrency, and the laundering of proceeds from Mexican fentanyl cartels and Southeast Asian scam compounds that force-labor hundreds of thousands of victims.

Beijing has taken selective actions, such as revoking passports of Chinese nationals involved in offshore gambling and cooperating with Myanmar to arrest tens of thousands of suspected fraudsters, but these measures have not stemmed growth. The United States, dating back to the Trump administration, has launched task forces and issued executive orders targeting cybercrime and sanction evasion, yet Chinese intermediaries continue to shield illicit flows.

The article highlights how local officials and United Front affiliates often protect these activities because they bolster regional economies and serve Beijing's foreign-policy aims, including trade with Russia that skirts U.S. sanctions. Ultimately, the piece calls for deeper Sino-U.S. cooperation on financial intelligence and the use of existing legal tools to disrupt the underground networks.