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TRADE WARS
Microsoft chief makes first China visit amid probe: report
by Staff Writers
Shanghai (AFP) Sept 26, 2014


China finds $10 billion in fake trade deals
Shanghai (AFP) Sept 25, 2014 - China has uncovered fake trade deals worth nearly $10 billion, the country's foreign exchange regulator said Thursday, following an investigation aimed at illegal cross-border capital flows.

A large number of companies were found to have forged, altered and reused documents to create fake trade deals, Wu Ruilin of the State Administration of Foreign Exchange (SAFE) told a regular briefing in Beijing.

"Fake trade deals can do severe harm to... the overall economy," said Wu, deputy head of the management and inspection division, according to a transcript posted on the SAFE website.

"They will not only increase the pressure of hot money inflows, but also provide a channel for the illegal cross-border transfer of funds from illegal criminal activities," he added.

China keeps tight controls over capital flows into and out of the country due to fears they could disrupt the economy, the world's second-largest.

Since April 2013 the regulator had launched an investigation to crack down on fake trade deals in 13 provinces and cities and expanded it to 24 provinces and cities this year.

As part of those investigations, authorities probed entities involved in the fraudulent trade financing incident uncovered in June at Qingdao port, located in eastern China, in which the same batch of metal inventories were used as collateral to secure bank loans, according to Wu.

The government body had handed over 15 of the fake trade cases to police, he said.

Microsoft Chief Executive Officer Satya Nadella is visiting China for the first time since taking the post in February, state media said Friday, as authorities probe the US technology giant for alleged monopoly behaviour.

The China Daily newspaper reported Nadella "extended an olive branch to Chinese regulators" in Beijing on Thursday by saying the company was willing to work with officials.

Microsoft did not immediately respond to a request for comment on the visit.

Nadella was quoted by the newspaper as saying that Microsoft has made contributions to the Chinese economy.

"The fundamental success of Microsoft was based on the value we create in every place that we operate in. We were able to come into China and will continue to contribute and cooperate with governments," he said.

China's State Administration for Industry and Commerce (SAIC) said in July it was investigating the US technology firm for "monopoly actions" related to its flagship Windows operating system and Office suite of software.

The head of the SAIC said last month the probe includes the way the US technology giant distributes its media player and browser.

Microsoft has said it complies with Chinese law. It has previously faced anti-trust investigations in other markets for tying the company's Windows system to its other products.

Nadella spoke at Tsinghua University in Beijing on Thursday, China Daily said.

He is scheduled to travel to the southern city of Shenzhen on Friday, the report said. His two-day trip includes meetings with government officials, it said, but did not identify them.

Microsoft is due to offer its Xbox One game console in China on Monday -- a week delay from the original launch date -- becoming the first such product to enter the market in 14 years after the government relaxed a ban provided the devices are assembled in the Shanghai free trade zone.

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