China’s P2P ‘financial refugees’ face never ending wait to recover lost US$120 billion
An exporting company owner in his 40s in the eastern province of Zhejiang, a public relations manager in her 20s in the southern city of Shenzhen and retired state-owned enterprise executive in eastern-central coastal province of Jiangsu would normally share little in common as they blend into China’s 1.4 billion population.
Like many, they did share a common and unsurprising goal of seeking a return on their investments. But unfortunately it is the fact that they have joined the ranks of Chinese “financial refugees” who have borne the brunt of the spectacular collapse of various online peer-to-peer (P2P) lending schemes and special investment trust programmes tailored to affluent investors that binds them together.
In 2017, Liu Yijia from Zhejiang province, Li Wei from Shenzhen and Feng Mei from Jiangsu joined millions of people who put their savings into investment schemes that promised double digit annual returns – a big temptation compared to a one-year bank deposit rate of 1.75 per cent and a cash account interest rate of 0.3 per cent available at traditional banks.
Three years later, the three have been left frustrated as not only did they not receive the promised returns, but they also lost their principal investments.