China Locks Down Financial District As P2P Lending Implodes

China has ordered a lockdown of Beijing’s financial district Monday (August 6) to prevent individuals from protesting a crisis in the peer-to-peer (P2P) lending marketplace.

According to a report in the Financial Times, hundreds of police officers and security guards gathered near the offices of banking and securities regulators, as well as the entrance to the underground train stop for the financial district. Police were checking identity cards of anyone entering the area to prevent organized demonstrations by groups of investors that lost money as P2P lenders went under.

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https://www.pymnts.com/news/international/2018/financial-crime-china-beijing-protest-p2p-lending-losses/

In June P2P's (peer to peer online lending companies) lost $200 billion and in July another 200 P2P's ran into trouble. Clearly investors are extremely upset, many assumed Beijing would bail out these firms as it has always done in the past.

After the 2007/8 financial crises China used debt to fuel it's economy, loans were used to repay loans and collateral used as security for multiple loans. If you ran out of money and couldn't repay your debt you took out another loan.

China's local governments have forcefully expropriated property from approximately 63 million villagers, onsold the property to developers who then took out enormous amounts on loans to build infrastructure that stands largely empty today. The belief that China's economy is built on exports is a myth, companies like Huawai are largely dependent on government subsidies to make them profitable, these subsidies also give them an unfair advantage against companies from other countries, where these companies are forced to shutdown because they cannot compete against China's heavily subsidised industries.

The question today is how far Beijing will let this go before it intervenes once again, simply for the sake to keep China's social fabric from tearing apart.

Authorities are cracking down on the massive swindle that the P2P shadow financing market is, operating without regulation or supervision. Which is what authorities tend to do.

Problem comes however because the swindlers take the money and run. CCP-PRC police are notorious for doing nothing to track down and apprehend criminals of all kind. Police have almost zero investigative capability, capacity, ability, expertise, interest. If you're a political enemy the higher up political police will investigate you with a swift and effective expertise. However, if you're a criminal swindling people of their money you know you're going to cut and run a rich man because police only yawn and sip tea.

Hence the protests by swindled people against the authorities. Not for cracking down to chase away the swindlers, but for predictably letting the swindlers operate then cut and run with the money.....




周周侃：P2P北京万人维权的几个疑问 贯穿中国人一生的“压榨链”






Police swarmed train stations to identify protesters traveling to Beijing to demonstrate against the swindlers getting away with it yet again while police focus instead on arresting protesting citizens in the name of peace and order. The swindlers are meanwhile traveling freely as rich men.

網民發動1萬P2P苦主赴京抗議 警嚴密堵截







P2P投资人涌向京城 警方倾巢围追堵截

Beijing (Failed) Protests Over Collapse of China’s Peer-to-Peer (P2P) Industry A P2P Crisis: investors who have lost their savings tried to take their grievances to the street.





The regulatory crackdown on Chinese online lenders caused a climate of heightened tension in Beijing today, where investors who have lost their savings were trying to take their grievances to the street.

There were also reports of people being taken away on public buses. “Have truly never seen anything like this in Beijing. We counted 120+ buses at site of the (failed) protest against P2P lending fraud, stretching far as the eye can see – all the way to Diaoyutai. Cops nap, wait in each. Petitioners rounded up, shipped off inside. The SCALE..!,” Becky Davis (@rebeccaludavis), China Correspondent for Agence France-Presse, tweeted on her timeline.

A Twitter account named “P2P China Right” (@P2Pweiquan) posted: “As a result of the government’s powerful police force and strict guard, hundreds of buses are waiting at the gate of the CBRC, About 10000 people were forced to take the bus. Announcing: the 8/6 event failed!”

https://www.whatsonweibo.com/beijin...collapse-of-chinas-peer-to-peer-p2p-industry/






China deploys huge police force to prevent fraud protest

Security forces rounded up groups of petitioners from the surrounding streets and parks and drove them away in the buses under police escort. A man in plainclothes sealed the windows of one vehicle shut with clear tape before it was driven away.

A policeman told AFP they would be taken to a neighbourhood on the outskirts of Beijing, where China maintains what rights activists describe as "black jails". Petitioners are typically held there until minders escort them back to their home towns.

"Cases sent there are essentially sent into a black hole -- people never get any results and end up like characters in 'Waiting for Godot'," explained Patrick Poon, China researcher for Amnesty International.

fullstory

I've said it many times, China's government won't hesitate to exterminate hundreds of millions if that's what it takes to restore order. They also won't hesitate to put hundreds of millions on severe austerity programs if they decide that it is expedient to restore economic balance, or to retaliate against rivals.

Civil unrest doesn't faze China's authorities.

PS: Participating in any of these protest actions also seals your fate forever in China's new social credit ranking system.
In the future, if you want a job, or credit, or a professional license, you may be denied all of them due to a bad mark or low score on your social credit ranking.

an ancient tradition starting to go bad
the chinese borrowers are now able to become mobile after they default
they are no longer concerned about the dishonor that motivated previous generations to repay their debt to the hui
and now the investors are pissed that the government will not bail out their bad investments - thus, the protests

Pooled Cash of Loan Clubs Key to Asian Immigrant Entrepreneurs - latimes

Checkerboard Strangler said:

I've said it many times, China's government won't hesitate to exterminate hundreds of millions if that's what it takes to restore order. They also won't hesitate to put hundreds of millions on severe austerity programs if they decide that it is expedient to restore economic balance, or to retaliate against rivals.

Civil unrest doesn't faze China's authorities.

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Civil and social unrest scares the CCP Boyz sh*tless. There's no question CCP Boyz will slaughter a hundred million Chinese in one day if that is what they decide they'd need to preserve themselves in power and in the money.

The national police we see handling these protests are the police of the Public Safety Bureau. They are the traffic cops and the cops who lift an apple from the vendors cart on the sidewalk. CCP Fanboyz around the world like to say these cops who do not carry firearms are unarmed. However, plenty of guns and ammo are moments away for each of 'em. They are the notorious Cheng Guan that leave sidewalk vendors who won't move their stand dead in the street. Chinese people will obey a Party-Government bureaucrat but most Chinese absolutely brook no sh*t from the police whom they disrespect completely, which is nothing new or recent in China. The attitude is as old as the hills.

The Public Security Bureau police are the political police who stalk you and hang outside your building. They're the guys who drag you away never to be heard from again. The People's Armed Police are a paramilitary arm of the PLA. They are 850,000 in 48 divisions located in garrisons in each province and they are the force the population genuinely fears. We don't see the PAP or hear them roaring their chants as they come at you unless the Boyz mean business and want to settle things for keeps. It's the PAP who are the trained and drilled loyalists who exist to extinguish rebellion, insurrection etc whether it be spontaneous or organized.

Chinese elites know that because of their absolute rule, suppression, repression over 5000 years the people have no alternative than to demonstrate, rebel, rise up, conduct insurrection etc. It is what keeps the elites awake at night. Xi Jinpingpong just appointed himself Emperor of China because he learned the hard way during his first five years as president there isn't any other way. Not in China there isn't. Yet every dynasty has failed because of this absurdity and self-defeating mindset of the Chinese elites. CCP Boyz are but another dynasty in business suits. CCP is a nervous dynasty because it is a young dynasty. So look for yet another dynasty failure. It's in their blood, to borrow an expression of the past.

The P2P lending collapse is only the tip of the iceberg.

To fuel it's economy and meet targets set by Beijing, Chinese local governments circumvented regulations to curb lending by creating LGFV's (Local Government Financial Vehicles) which are companies used to issue bonds that enables them to build infrastructure on parcels of land confiscated from villagers.

Some of the local governments have now started to default as some of these bonds become due in 2018.

Chinese city misses payday as Xi reins in shadow banks

Local government borrowing in China is strictly regulated. Most cities must instead use state-owned local government financing vehicles like Leiyang City and Rural Construction Investment, which tap banks or the bond market for money to fund infrastructure projects.

In 2015, Leiyang issued through its financing vehicle two tranches of bonds totaling 1.9 billion yuan, resulting in an annual interest payment of 130 million yuan. Principal repayment also began in 2018. The city is scheduled to pay back 380 million yuan each year from 2018 to 2022, and the first payment of 140 million yuan was made in April, the month before it failed to deliver workers' salaries.

China's Ministry of Finance puts local government liabilities at 16.5 trillion yuan, but the International Monetary Fund estimates the figure at more than 30 trillion yuan because of hidden debts that have not been officially accounted for. The national auditor said in April that six municipalities from five provinces and regions had illicit loans totaling 15.4 billion yuan.

"Local governments cannot pay salaries and have no intention of repaying their debts," a former official of the National People Congress' Financial and Economic Affairs Committee said in May. "They cannot even pay interest, let alone the principal."

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https://asia.nikkei.com/Politics/Chinese-city-misses-payday-as-Xi-reins-in-shadow-banks



China's Shadow Banking sector debt is estimated at US$12 Trillion, the LGFV's slice at approximately 7 Trillion Yuan (US$1 Trillion) P2P's US$256 billion. The Shadow sector is complex and feature many different Wealth Management Products, often used to bury unpaid loans.

ps ^^ figures could be slightly off, multiple sources vary on exact amounts due to the opaque nature of the Chinese Shadow Banking sector