China breaks up large underground bank ring

BEIJING (Reuters) - Police in southern China have broken up a ring that operated as an underground bank to illegally send around 10 billion yuan ($1.46 billion) abroad since 2004, state media said on Monday.

Eight of the 11 people arrested were Vietnamese, who operated in the southern region of Guangxi, which borders Vietnam, Xinhua news agency said.

Most of the money was sent to Vietnam, the report added.

Beijing has pledged to crack down harder on illegal capital flows across its borders, which stem in part from the country's restrictions on currency conversion.

Two years ago, Chinese Premier Wen Jiabao warned that illegal fund flows could harm the country's financial stability. ($1=6.834 Yuan)

(Reporting by Ben Blanchard; Editing by Dean Yates)