An underground banking network in China has spent the last decade creating a foothold in the global money laundering industry.

Reporting from The Economist claims that a vast network has quietly become a central force in money laundering, enabling individuals to slip past Beijing’s strict controls on moving money abroad. These shadow financiers act as middlemen, moving Chinese money abroad while helping criminal groups to clean illicit profits. It’s a form of matchmaking that, according to U.S. Treasury estimates, fuels a laundering pipeline worth more than $150 billion a year.

“Marketplace Morning Report” host Sabri Ben-Achour spoke with Sue-Lin Wong, Asia correspondent for The Economist and host of the “Scam Inc.” podcast, to learn more about her reporting. The following is an edited transcript of their conversation.

Sabri Ben-Achour: So, can we just start by talking about how money laundering works? Can you explain something called “the mirror transaction?”

Sue-Lin Wong: So, you've got a drug cartel in the U.S., and it needs to launder money. Then you've got a mother in Shanghai who's very wealthy and has a son who's studying in New York City, and she wants to buy him an apartment there, but she doesn't have a U.S. bank account, and she doesn't have U.S. dollars. China has really strict capital controls. Individual Chinese people, in theory, can only bring out 50,000 U.S. dollars each year. So to get around this, she contacts a broker online, and she will transfer renminbi from her Chinese bank account A to the broker's Chinese bank account B, and she will be paid or reimbursed in U.S. dollars in some American bank account that she has access to, minus the broker’s fee. That is actually often drug money. And so then, well, how do the drug cartels get reimbursed? They might want Chinese renminbi to buy, you know, fentanyl precursors in China, or to buy legitimate goods that perhaps they're now exporting to Mexico. These brokers basically run massive underground banks.

Ben-Achour: So, it sounds like it's kind of like “I will pay your bill in the U.S. if you pay my bill in China.”

Wong: Yes, exactly. So how and why did China become a leader in this world? Until not that long ago, there were lots of different criminal groups that engaged in money laundering. But what we've really seen over the past decade is a consolidation of the industry, and that's to do with the Chinese government making it much, much harder for ordinary Chinese to take money out of China. There is actually massive demand from wealthy Chinese people who want to get their renminbi out of China. And it just so happens that these professional underground banks or money laundering services have huge amounts of illicit funds that come from drug sales and online scams and all kinds of other criminal activity that they need to launder.

Ben-Achour: Is this something that authorities have a grip on?

Wong: Not really. It's actually very difficult to even estimate the size of this industry, because so much of this is happening underground or in the shadows or in the gray economy. Based on my reporting, law enforcement around the world — whether it's in China or the U.S. — is finding it very, very difficult to get a grip on this.