Thousands of foreign trade operators in Yiwu and Guangzhou on the mainland have had their bank cards frozen by the Chinese Communist Party’s public security authorities for months for using underground money changers to collect payments from foreign customers, leaving some operators without funds and in a difficult business situation. A few days ago, some operators revealed the reasons why they had to use underground money changers.
According to China Economic Weekly on May 6, after the outbreak of the epidemic last year, the number of overseas businessmen who originally entered and left Yiwu in large numbers has dropped sharply, Yiwu foreign trade operators also began to receive payments mainly in yuan, foreign businessmen mostly through the international underground money changers to pay for goods to operators. Some underground money changers also transfer money for overseas gambling, telecom fraud, etc., resulting in the operators’ bank cards frequently frozen by the public security, many merchants in business difficulties.
The exposure of the freezing of bank cards by the Chinese Communist Party has sparked concern among the mainland public, with some accusing these operators of not using underground money changers to collect money, but rather using normal official channels. Some of the operators whose cards were frozen revealed their plight.
Wang Hong, a foreign trade operator in Yiwu, who has long been doing business in the Middle East, said that before the outbreak of the epidemic, foreigners in Yiwu to buy goods when the payment method is mainly cash payments and underground money transfers, if foreigners with insufficient cash, through the underground money transfers, because “these two transactions are the lowest cost.
But the outbreak of the epidemic, foreign businessmen to and from the mainland inconvenience, cash transactions reduced, foreign investors mainly through the underground money channels to pay foreign trade operators in Yiwu, underground money will be charged a commission in accordance with a certain percentage of the remittance, the commission cost is much lower than the cost of legal channels.
Wang Hong said, through the formal channel transfer costs are higher, the general foreign trade business is also 8% to 10% profit, if you take the formal settlement channel, the transaction costs need to increase by 3% to 5%, which is equivalent to halve the profit. Some large foreign customers of the commodity offer cheaper, business profits down to 3% to 5%, “take the formal channel is unprofitable.
In addition, many merchants are located in countries where remittances are inconvenient, some merchants are located in countries (some Middle Eastern countries) lack of foreign exchange in U.S. dollars, the high cost of foreign exchange, merchants such as remittances in U.S. dollars, the cost is too high. If Yiwu’s comprehensive trade costs are too high, foreign customers will certainly flow in large numbers to Indonesia, Malaysia, India, Mexico, “because of the low technical content of small commodities, no technical barriers, and their labor is cheap, will form a competitive advantage to us.”
Yiwu operators bank accounts were frozen by the public security authorities across the country frequently, so that the production and operation activities of the operators snowballed.
In Yiwu hardware products business in Yongkang, Zhejiang business owners Chen Xiaofeng (a pseudonym) had and a number of partners encountered “frozen card” problem, to the Yiwu Mall police station to seek help.
Chen Xiaofeng said that since last year, several of his old customers have been frozen bank card situation, affected by this, he also has a number of commonly used bank cards were frozen.
As customers’ bank cards were frozen, Chen Xiaofeng could not get the money in time, plus his multiple bank cards were frozen, his cash flow was on the verge of breaking. “Yiwu to small and medium-sized enterprises, not many bosses can afford to have their bank cards frozen for a year and a half.” Chen Xiaofeng said that even though some of the stronger economic strength of business owners by the freeze card storm is not much, “but everyone has become cautious to expand production and business.”
Chen Xiaofeng said the problem of frozen cards is very serious, has dragged down many business owners and foreign trade operators, if the future of trading practices gradually standardized, Yiwu small commodities may decline in international competitiveness, “in the long run, it is more deadly to Yiwu.”
The report said that 80% of Yiwu’s foreign trade operators have had the experience of frozen bank cards, some operators were frozen funds of more than ten million yuan.
After the matter was exposed, many netizens stood on the official side of the blame merchants should not get back through the underground money, but many netizens expressed a different point of view.
Netizen “reed pale” said: “the regular channel fee is high, so take the underground bank, that the incumbent, can not find a way to make the fee lower it, lower so there is a need to go dark it, although not look profitable, but a lot of money will flow into ah, there are also earned. If there is no Alipay, WeChat, our banks do not know the general charges will not be higher, there is competition to optimize, there is development.”
Netizen “yo” said: “the biggest difference between state-owned enterprises and private enterprises, is more procedures, more proof. You let a small business, private enterprises, small factories each kind of invoicing, have to prove that the customer’s money is white, who can do business? All rely on the state to pay wages to support workers? Foreign exchange is less, the money earned back or consumption in the domestic more, a small factory to support ten households, 10,000 small factories can support 100,000 households. Public security can not catch foreign criminals, only bullying domestic. Really make money money bank not to move. No big energy, who can afford to get the underground money.”
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