Anti-corruption fervour was on the agenda at the annual parliamentary session of the National People’s Congress this month. So much so that one delegate made a drastic suggestion. He proposed reissuing all the country’s bank notes with a different design.
The point: that corrupt officials would not be able to profit from their hoarded cash piles (i.e. they wouldn’t dare to swap their illicit savings into new notes).
In the end, the motion was not passed because the economic and social cost of reprinting the notes was reckoned to be too big.
Had it gone ahead, there would have been another positive impact – the removal of the countless counterfeit notes floating around the economy.
Last year, police confiscated Rmb532 million ($86 million) of fake money. Some forged notes are so convincing that even bank machines sometimes give them out. To counter this growing problem police have set up three state of the art anti-counterfeit centres to hunt down their production bases.
Amazingly 97% of all forged paper money – according to a recent article by Xinhua – can be traced back to the moulds created by one man: Peng Daxiang, an artist who was sentenced to life in prison in 2014. Using simple tools such as a magnifying glass, the 73 year-old made at least 24 master plastic plates for printing counterfeit bills, selling them for up to Rmb120,000 each.
Fake Rmb100 notes sell for up to Rmb50 each and gangs which make them can earn up to a Rmb100 million a week, Xinhua said.
In recent years, forgers have also started to produce smaller denomination notes and even coins. “Since people do not pay much attention to such low-value cash, the money is spread widely, harming the general public,” the Global Times quoted a senior police officer as saying. In February police in Shandong arrested a group of people who had produced Rmb160,000 worth of counterfeit coins.
The topic is a source of much grievance online. “Never use ATMs. They often dispense fake notes,” cautioned one weibo user, after an earlier post from someone who had just withdrawn a counterfeit Rmb100 bill.
Another person, a shopkeeper, claimed he is presented with forged notes several times a day.
Like all modern money, Chinese notes have safety features including a metal strip, a holographic feature and watermarks. But because the Rmb100 is the largest denomination note, even moderate purchases are paid with many more bills than a vendor can easily check for fakes.
One alternate suggestion to the NPC delegate’s idea of redesigning bank notes was to cap the biggest denomination at Rmb10, meaning that corrupt officials would need far more storage space. But that would make finding fakes even harder for shops, given the vast increase in notes they would need to count and check.
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