CHINA-ECONOMY: PYRAMIDS FINANCIAL SCAM

Over the past couple of months Pyramids schemes have attracted the adverse notice of China's official media and security authorities. At the end of July 2017, hundreds of members of one such scheme took to the streets to protest against the arrest of their leader. Slowing of the economy and lack of jobs alongwith the advent of new technologies and a highly innovative financial system that has given them a place to hide in plain sight, have expanded the reach of these pyramid schemes. In 2010, the China Anti-Pyramid Selling Association published a report in which it estimated that there were 40 million people across the country caught up in pyramid schemes. It now believes at least 50 million people are involved—and that there could be far more. The police have been more active and initiated cases against almost 3,000 pyramid schemes in 2016, 19% more than the year before.In large part, the growth of pyramids has been made possible by the internet. According to the Communist Party-sanctioned Legal Weekly, Shanxinhui, the alleged pyramid that held the protest in Beijing, promised returns upwards of 30% and accumulated five million new members in the space of a year.





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