Illegal Fundraising

The crackdown on illegal fundraising will be tightened to protect people and fend off systemic risks, the Office of the Inter-Agency Anti-Illegal Fundraising Taskforce said on April 25.

There were over 5,100 illegal fundraising cases in 2016, involving 251.1 billion yuan ($36.5 billion). The number of cases went down 14.48 percent and the amount involved decreased 0.11 percent year on year.

It is the first time both figures have declined, showing illegal fundraising, which had been rising in the past years, has been contained, Yang Yuzhu, head of the office, said.

However, Yang added that the overall situation is still complicated and severe, highlighted by an increase in organized crime, online fraud and cross-regional crime.

China will strengthen supervi- sion of intermediaries in private financing, enhance crackdowns on fraudulent advertisements and improve the legal system to guard against illegal financing, Yang said.

Key fields including online lending, private wealth management, rural cooperatives and private equity will be under greater regulatory scrutiny.

Internet finance has grown fast in China as investors seek higher returns than on bank deposits while small businesses find it easier to secure funds through online brokers. But risks have piled up too as regulations cannot keep up with the sector’s development.

Among the high-profile fraud cases in 2016, Ezubao, an online peer-to-peer lending platform, cheated people out of nearly 60 billion yuan ($8.7 billion) through fake investment projects. Police opened