China Banknote Printing and Minting Corp Photo: VCG

China's central bank on Wednesday denied rumors that Chen Yaoming from the China Banknote Printing and Minting Corp was being investigated because he was suspected of printing banknotes with the same code number worth 2 trillion yuan ($313 billion) without authorization.

Officials from the Currency Gold and Silver Bureau of the People's Bank of China (PBC) said that the printing and issuing of banknotes has strict procedures and technical standards, and the PBC has been carrying out relevant work in accordance with laws and regulations. 

The PBC strongly condemned the rumor-mongering and reported the case to the public security departments.

The rumor circulated on social media as the banknote printing and minting corp and "currency printing" are shrouded in mystery in most people's eyes, observers said. A Chinese economist reached by the Global Times on Wednesday said that "the falsehood of the rumor was evident at a glance," noting that printing that amount of banknotes without authorization was impossible under China's financial and regulatory system.

The Global Times found that the rumor came from two screenshots circulating on social media. According to one of the screenshots, a resident received two 100-yuan notes of the fifth set issued in 1990 with the same number at a bank in May. The screenshots showed that, as determined by the commercial bank, both the two notes were real.

Another screenshot showed reports of Chen surrendering to the police and being put under investigation. 

However, the fifth set of these notes was first issued in 1999, so there is no so-called 1990 version. As a result, some netizens quickly found the rumor was fake news. 

But the rumor sparked huge attention due to the mention of Chen, who is the board director and member of the Party committee at the banknote printing and minting corp. Chen is being investigated on suspicion of serious violation of disciplines and laws after turning himself in to the authorities, an official statement said earlier this month.

Chen became the deputy general manager of the company in 2001 and director in 2021. 

Under the direct leadership of the PBC, the company provides banknote printing, minting, banknote papermaking and other services.

The China Banknote Printing and Minting Corp has 23 large- and medium-sized enterprises including one state-level technical center.

Wan Zhe, an economist and professor at the Belt and Road School of Beijing Normal University, told the Global Times on Wednesday that the story was impossible. In the process of banknote printing, repeated verification and checks must be carried out at each step to prevent all possible problems and loopholes.

Wan noted that if cash of $2 trillion yuan flowed into the market, it would cause a huge disruption in currency circulation, "but we did not see such chaos." 

In addition, with fewer cash transactions, it's unlikely that $2 trillion in yuan banknotes with the same code number would be found.

The 2020 financial statistics report released by the PBC showed that by the end of 2020, M0 money supply in China surpassed 8.43 trillion yuan. 

M0 is central bank money, which includes currency and central bank depository accounts.

Wan hailed the timely response of the PBC to dispel the rumor as such a story was indeed easy to spread.