A report says a Chinese move against illicit financial transfers has unearthed $177 billion of financial flows involving money laundering and other scams.

A total of 170 cases of money laundering and illicit fund transfers, totalling more than RMB800 billion (around $177 billion), have been exposed by authorities in China as it cracks down on underground banks, Reuters has reported, citing public Chinese media.
The crackdown began in April this year, the report said.

Illegal flows have affected China’s ability to manage its exchange rate regime but also affected its financial and capital markets, the report continued. 

In one illegal money transfer case, the biggest discovered in China so far, about RMB410 billion worth of Chinese money had been transferred overseas using non-resident accounts.

The news service, citing unnamed sources, said China has moved to restrict trade at offshore renminbi clearing banks and tightened capital controls even as the Communist Party-run country seeks to get its currency ready to be included in the International Monetary Fund's reserve basket.

The report is also part of a broader story of how the current party leadership in China has sought to crack down on corrupt public officials. With a number of such persons looking to flee the country, it also puts more pressure on wealth managers and other financial organisations to have robust KYC practices in place, as well as strong anti-money laundering controls.