SHSS Dean and IEMS Faculty Associate Kellee Tsai comments that more Chinese nationals are falling prey to investment scams in mainland China as there are only a handful of investment opportunities offered by state-run banks, most with painfully low return.
Over the past decade, millions of investors have sunk their cash into thousands of companies like Qiangqiantong (which roughly translates to Get Rich Quick) and others with names such as Money Pig and Qianbao, or Wallet. The promises were the same — steady growth, big dividends and a chance for investors to put financial worries behind. Some state-owned banks even helped facilitate payments, and government officials spoke of some of the P2P companies in glowing terms.
But since June, hundreds of upstart investment companies have gone bust — many falling victim to credit runs, risky bets or the same Ponzi-scheme unraveling in which nearly 1 million investors lost a collective $9 billion. Those defrauded in the failed investment schemes have vented their anger at the government, with protests calling for more accountability and bailouts. It is unclear whether Chinese leaders will step in to help people recoup their money.
Read the full article in the Washington Post here.