Gold prices have surged 30% this year, making it a prime investment for Chinese consumers. Demand for gold bars and coins reached decade-highs in the first half of 2024. However, the precious metal’s portability and liquidity have made it a tool for fraud and money laundering in China.
- Jewelry stores in China report unusually large and mysterious orders for gold bars, often shipped to remote locations.
- Scams linked to gold have risen, including romance fraud and impersonation schemes, such as one in Hangzhou where a woman lost 19 million RMB to an online scammer.
- Economic hardships, including China’s real estate slump and high unemployment, drive desperate attempts to make money, increasing susceptibility to fraud.
- The number of money laundering convictions in China skyrocketed from 13,900 in 2019 to 69,200 in 2022, reflecting a sharp rise in illicit activities.
- Criminals exploit gold’s high value and liquidity as a stable asset during economic instability, while victims are often unaware of financial risks.
- Chinese police are targeting these sophisticated schemes, warning that couriers assisting fraudsters may face legal repercussions.
The combination of economic downturns, lack of investment options, and limited financial awareness continues to make gold an appealing yet risky asset, both for legitimate investors and criminals.
