Global Financial Integrity


China plays an outsized role in transnational crime, illicit financial flows mirroring its growth as an international superpower


Washington, D.C. – The People’s Republic of China (PRC or China) plays an extremely impactful role as a source, transit and/or demand country in many of the most widespread and serious transnational crimes as well as a key facilitator of global illicit financial flows (IFFs).

Global Financial Integrity’s (GFI) new report, Made in China: China’s Role in Transnational Crime & Illicit Financial Flows, scrutinizes China’s role in four different transnational crimes — drug trafficking, counterfeiting and IP theft, human trafficking and wildlife trafficking — as well as the IFFs associated with these crimes. It explores the dynamics of these crimes as they relate to China both domestically and internationally; the political, economic, social, and cultural drivers and facilitators to these crimes; laws and regulations related to these crimes; and how the Chinese government has responded to these crimes and IFFs.


Read the report


“Over the last several years China has expanded its influence in a broad array of transnational crime areas including trafficking, narcotics and IP theft” said GFI’s President & CEO Tom Cardamone. “The flow of illicit money related to these activities is massive and the impact on global security has been substantial.”


  • China has long been a center for narcotics production and trafficking. It’s domestic “drug industry” alone is estimated to have an annual value of US$82 billion.
  • Pairing the International Labor Organization’s average annual profit of US$5,000 per victim in the Asia-Pacific region with the Global Slavery Index’s estimated 3.8 million trafficking victims in China gives a rough estimate for the value of human trafficking in China at US$19 billion.
  • China and Hong Kong together are responsible for 86 percent of globally-traded counterfeit goods, with an estimated value of US$438 billion each year.
  • The Chinese Academy of Engineering estimated that the farming of wildlife in China for the TCM industry is worth US$7 billion annually, however, as The Guardian points out, “that figure does not take into account the illegal trade… That number is likely to be many times higher, judging by seizures of animal parts such as pangolin scales, rhino horn and tiger bone.”
  • Since 2007-2008, China’s shadow banking system has mushroomed into a $10 trillion obscure financial system that connects thousands of financial institutions with companies, local governments and hundreds of millions of households.
  • Improve the regulation and oversight of the pharmaceutical and chemical manufacturing industries.
  • Design and enact legislation solely focused on human trafficking.
  • Focus on the manufacturers of counterfeit goods, not just the platforms where they are sold.
  • Ban the use of wildlife in TCM.
  • Hold countries accountable for weak pharmaceutical and illicit chemical controls.
  • Hold China accountable for abuses in Xinjiang.
  • Continue to make combatting corruption a high priority in the U.S. national security strategy (as well as other jurisdictions).
  • Target the individuals, entities, and countries facilitating financial crimes and money laundering, in particular Chinese professional money laundering networks.

In regards to the factors contributing to China’s rise in global crime, internal dynamics within the country—economic, political, social, and cultural—are major drivers and/or facilitators of transnational crime and IFFs. Politically, by far one of the clearest drivers of transnational crime in China is state-sponsored forced labor, the most notable example is China’s repression of Uyghurs and other Turkic Muslims in Xinjiang. Economically, innovation in industries such as manufacturing, computer technology, and pharmaceuticals have also translated to gains in transnational crime.

Certain social policies, such as the now-rescinded “one-child policy” and the national household registration system, known as hukou, have contributed to the prevalence of sex trafficking and forced labor in the country. Additionally, the cultural importance of traditional Chinese medicine (TCM), has spawned a legitimate multi-billion-dollar global industry but has also contributed greatly to the illegal wildlife trade due to the use of wildlife in different medical treatments.

Similarly, the methods used to launder illicit proceeds of Chinese origin, as well as the methods used by illicit Chinese actors, are both strongly linked to each other as well as Chinese culture and the economy. For example, there is a strong symbiotic relationship between Chinese underground banking or fei-chien, trade-based money laundering, and illicit capital flight.

Find the full report here.

Watch the report launch webinar here (available after 10/27/22).


About GFI

Global Financial Integrity is a Washington, D.C.-based think tank, producing high-caliber analyses of illicit financial flows, advising developing country governments on effective policy solutions and promoting pragmatic transparency measures in the financial system to promote global development and security.

Press Contact

Channing Mavrellis

Illicit Trade Director

@cmavrellis  @IllicitFlows