Chinese police have reportedly detained dozens of small investors who were scammed out of their money by a state-linked investment group, accusing the victims of acting on behalf of “overseas anti-China forces” by airing their grievances in public.
At the heart of the controversy is the Shandong Jianghaihui Financial Group, a government-supported investment company headquartered in Shandong province. The company abruptly ceased operations in March, and its founder fled to the United States along with his wife.
Roughly 100,000 small investors were angered to discover their $2.74 billion in investments went up in smoke when the financial group dissolved. When the Chinese government seemed disinclined to do anything about it, the defrauded investors began talking to reporters — and the government very quickly did something about them.
Radio Free Asia (RFA) reported on Wednesday that dozens of victimized depositors, most of them women, have been detained by the police after they tried to get around the Communist regime’s embargo on news coverage of the Shandong Jianghaihui story by talking to foreign reporters, including RFA itself.
“All the people who had contacted you from here were detained,” a source in Shandong told RFA. “They said we were being used by international anti-China forces and that we were all committing crimes.”
According to RFA’s sources, Chinese police looked for news reports about the Shandong financial collapse on foreign websites, got the names of the sources for their stories, and started rounding them up. Some of the unfortunate depositors were released within a matter of days, while others are in detention to this day.
There are several reasons the Chinese Communist Party regards this story as so troublesome. The regime is deeply worried about deteriorating public morale as U.S. tariffs bite into China’s export economy, so this is an exceptionally bad time for dozens of middle-class women to be talking about how an unscrupulous financial company stole their life savings.
Even worse, the anguished depositors say the government is partly to blame for the Shandong scandal, because oversight of the company was very lax, to say the least. Victims say they invested with the company because they believed its activities were part of the Chinese government’s efforts to stimulate private enterprise.
RFA noted a group of defrauded investors wrote the Chinese Communist Party’s disciplinary commission and the Ministry of Public Security to ask for help recovering their money. Their letter pointedly asked why the government was describing Shandong Jianghaihui’s activities as “illegal fundraising,” as if they were some sort of private charitable organization, rather than “contract fraud.”
The reason for this elusive rhetoric is most likely that the financial company held government-issued business licenses and passed government audits for years — just like a number of other financial companies over the past few years whose owners stuffed company cash in their pockets and fled overseas right before their investment schemes came crashing down.
Another example was a company called Zhongrong International Trust, which held $108 billion in assets at its peak, but went bankrupt in 2024. Chinese officials began the process of liquidating the trust’s assets on April 15, prompting large protests by empty-handed investors that were studiously ignored by Chinese state media — but not by dissidents such as the famed “Mr. Li Is Not Your Teacher” social media account:
Mr. Li noted that over a hundred of the demonstrators, including “the elderly, women, and cancer patients,” were “violently dragged” from the scene of the Zhongrong Trust protest by police.
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