China Targets Offshore Billions in Biggest Crackdown in Decades

It started with a tax bill.

Tom, a Beijing-based tech executive, had for years been trading overseas stocks without any backlash from local authorities. Chinese citizens buying and selling shares in foreign markets is officially illegal – besides a few permitted routes – but it’s also widespread. For many, the government’s inaction in closing loopholes for so long made it seem like these trades were within the spirit if not the letter of the law.

The first warning signs came from Chinese tax officials to investors like Tom, who was hit with a 100,000 yuan ($14,750) bill for his gains ...