China Beefs up Security in Financial Districts

 

BEIJING – China has ramped up the police presence in the financial district of its capital on Monday, with officers checking bystanders’ identity cards and telling pedestrians to disperse, while at least 50 police gathered outside the banking regulator’s office.

“There were loads of security people on the street this morning,” said one man leaving an office building two blocks from the headquarters of the regulator, the China Banking and Insurance Regulatory Commission.

Video clips circulating on Chinese social media earlier on Monday showed people gathering outside the regulator’s offices being taken away on buses by police.

Some of those taken away were heard on the clips identifying themselves as investors in peer-to-peer (P2P) lending platforms that could not pay them back.

Reuters could not independently verify the video clips, and the banking regulator could not be immediately reached outside business hours for comment.

P2P platforms collect funds from investors promising attractive returns. The funds are in turn offered to borrowers traditionally not served by risk-averse banks.

The number of online P2P platforms has shrunk dramatically in recent years as Beijing has cracked down on risky lending practices in a broader deleveraging campaign.

Ezubao, once China’s biggest P2P lending platform, folded in 2016 after it turned out to be a Ponzi scheme that collected 59.8 billion yuan ($8.7 billion) from more than 900,000 investors through savvy marketing.

By the time police made arrests in early 2016, the company had failed to repay 38 billion yuan.

By Elias Glenn – Reuters