China's economy is so uncertain that the wealthy are turning to an underground n...

• Some wealthy citizens in China are turning to underground money handlers to move cash, Bloomberg reported.

• Moving money through these quasi-banking systems is risky and can result in jail time.

• Some Chinese underground banks settle transfers using funds generated by criminal groups, the report said.

China's economy has endured broad headwinds over recent months stemming from its troubled property sector and the lack of post-pandemic rebound. According to a Bloomberg report on Sunday, wealthy Chinese citizens have been finding unusual, sometimes illegal ways to move money overseas to keep their cash safe amid the uncertainty.

Funds can move through an informal, underground banking system known as "hawala," the Bloomberg report said, which isn't regulated and is largely contingent on faith. Advisers to the rich have reported a surge in demand for backup options like these as Beijing tries to gain control over the financial tumult in the country.

Wealthy and middle class families feel the need to keep money outside of China, either for the sake of diversifying or to build a nest egg for future immigration.

Yet, per Bloomberg, opportunities to move cash without breaking any rules are limited, and individuals can typically wire no more than $50,000 a year overseas, and emigrating only offers a one-time chance to move money.

"These agencies have sprouted to meet soaring demand," Joel Gallo, an adjunct professor of finance at New York University Shanghai, told Bloomberg. "They act as quasi-banking firms, yet operate without the scrutiny of one and adroitly engage in regulatory arbitrage by standing in a gray zone."

The size of these furtive systems isn't known for sure, but they are global and pervasive. One report from 2021 saw an operation that spanned 75.6 billion yuan in assets spread across five organizations and 8,000 banks.

Citing the UK's National Crime Agency, Bloomberg reported that it's highly likely these underground banks have pools of funds ready in key locations in order to users to get their money quickly in local currencies.