Some Chinese escaped before the raids, which were carried out last night in Chauntra village in Mandi, 150 kms from here, following inputs by central intelligence agencies.
Besides currency, police also recovered mobile phones suspected to have Chinese SIM cards and international ATM cards.
The raids came within days of Tibetan spiritual leader the Dalai Lama saying he had been passed reports from inside Tibet warning that Chinese agents had trained Tibetan women for a mission to poison him while posing as devotees seeking his blessings.
Additional Director General of Police S.R Mardi said it was too early to conclude that those arrested were Chinese spies.
DGP D S Manhas said police had received information that illegal activities may be going on in this resettlement area.
"Based upon these intelligence inputs, the searches were carried out yesterday and we were able to apprehend eight Chinese who were staying there illegally and had not reported to the police," he told reporters today.
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Manhas said the Chinese, holding expired tourist visas, were found working and further investigations were underway. Some of them were engaged as masons, carpenters and electricians.
"We have registered two cases and huge cash of Rs 30 lakh and USD 3000 has also been recovered," he said.
When contacted in Delhi, a Chinese Embassy spokesperson said, "We have noticed the reports and we are seeking details from the Ministry of External Affairs". MORE