Frequent reports about Ponzi schemes have been appearing on China’s online P2P (person to person) financial management web sites. Those online platforms offer financial products with high returns to attract investments but in the end they have turned out just to be Ponzi schemes.
Phoenix published an article commenting on how widespread such schemes are. The article pointed out that the root cause is that China’s Central Bank keeps printing Renminbi, causing a drastic devaluation of the money. The public, in order to protect the wealth they accumulated in Renminbi and to counter the devaluation factor, has had no choice but to look for investment options that promised high returns.
Source: Phoenix, April 12, 2016