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Peer2Peer Finance News | October 22, 2018

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Beijing’s financial district on lockdown amid P2P protests

Beijing’s financial district on lockdown amid P2P protests
Tim Evershed

BEIJING’S financial district was under police lockdown yesterday, as angry peer-to-peer investors planned widespread protests.

This follows weeks of escalating tensions between China’s disillusioned P2P investors and the country’s many P2P platforms, with a series of platform collapses leaving investors with mounting losses.

Groups of investors who had lost money had organised a demonstration in Beijing’s financial district, but were met by a police cordon.

Identity cards were checked and demonstrators were taken away by the Chinese police, according to reports.

Read more: China tightens P2P rules in anti-fraud crackdown

China’s P2P sector has undergone an extraordinary rise and fall in recent year. According to Shanghai-based P2P consultancy Yingcan Group, the Chinese P2P industry is worth approximately $195bn (£150.4bn), just ten years after the first platform launched.

However, more than 4,000 Chinese P2P firms have now failed, according to Yingcan Group.

Just last month, 164 firms were identified as “problematic platforms” from which investors could no longer withdraw their funds, according to P2P database Wangdaizhijia.

Chinese investors are now questioning why P2P platforms were allowed to portray themselves as government-approved.

They have called on the government to take more action to help them recover their savings and investments from defunct and failing platforms.

Read more: China’s oldest P2P lender plans $200m flotation

However, according to Robert Pettigrew, director at the Peer-to-Peer Finance Association, the Chinese P2P industry is very different to its UK counterpart.

“The market there is enormous compared with ours and it has largely been unregulated,” Pettigrew said.

“They don’t have a self-regulatory body like the Peer-to-Peer Finance Association or a bespoke regulatory regime.

“The Chinese market has grown in fits and spurts and there has not been a consistent standard of regulation. It has not been as transparent as it has in the UK market.”

Read more: What do the P2PFA’s rule changes mean for YOU?