China gets tough on online financing schemes

Chinese police will strike hard against shady financial schemes because of the risk of social unrest from such fundraising ploys, according to the Public Security Ministry. Top of Form Guo Shengkun, China’s police chief, said at a nationwide meeting with local police authorities on Sunday that law enforcers must use “big data” technology to uncover and stop internet financial crimes as early as possible. According to the South China Morning Post, monetary easing in the past decade and a fragmented financial regulatory framework have led to a mushrooming of fraudulent investment programs, spreading quickly online and luring millions of mainland investors to put down their savings for the promise of high returns. In one case, Ezubao, a peer-to-peer lending company created by a man in his mid-30s, illicitly obtained more than 50 billion yuan (US$7.4 billion or HK$57 billion) from more than 900,000 investors in just 18 months before it was busted by the police in early 2016.