China denies ‘despicable’ banknote forgery worth US$314 billion as alleged scam goes viral
- Chen Yaoming, a board director of the China Banknote Printing and Minting Corporation, turned himself in to authorities earlier this month
- His detention started trending online on Wednesday amid rumours he had privately minted 2 trillion yuan (US$314 billion) of banknotes
China’s central bank on Wednesday denied a “despicable” rumour that a former senior official had forged 2 trillion yuan (US$314 billion) of banknotes after the allegation began trending on social media.
Chen Yaoming, a board director of the China Banknote Printing and Minting Corporation, an affiliate of the People’s Bank of China (PBOC), turned himself in to authorities earlier this month.
He is being investigated by the Central Commission for Discipline Inspection, the country’s top anti-corruption agency, under suspicion he “severely violated” ethics and laws.
While details of his charges have not been disclosed, his detention became a topic of intrigue on messaging app WeChat and microblogging platform Weibo on Wednesday, prompting the PBOC to report the speculation to police.
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Some social media users said Chen had been arrested for printing banknotes with the same serial numbers as other notes.
The online rumours were false and “despicable”, the central bank said in a statement.
“There are strict working procedures and technical standards for the printing and issuance of [the yuan],” it said.
“The People’s Bank of China has been doing it in accordance with laws and regulations.”
However, not everyone believed Chen was capable of such a ruse.
“It’s too ridiculous to be true. What a mess it would be if there’s an additional 2 trillion yuan [of money supply],” one user wrote on Twitter-like Weibo.
The largest note in China is 100 yuan, so 2 trillion yuan would be 20 billion notes, and would be worth about 2 per cent of China’s 2020 gross domestic product (GDP).
It is not the first time the PBOC has been forced to deny rumours concerning its core operations. In March 2019, it rejected claims of a reserve requirement ratio cut, and then in August that year reported online rumours about an interest-rate cut to police. A 30-year-old man was detained two months later.
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However, the PBOC has limited room to continue easing because major central banks, including the US Federal Reserve, are ready to quit monetary stimulus and raise interest rates.
Additional reporting by Bloomberg