Quick Money Or Quick Disaster?, October 2017

 

"It's almost an epidemic, especially in rural areas," saId one financial expert. She was referring to pyramid schemes (known in Chinese as ‘chain selling’), “which are flourishing in parts of China where education levels are low. The schemes prey on the vulnerable, typically young people and the elderly, with the promise of employment or lucrative returns for direct sales of products like cosmetics or health supplements… Chinese social media site Weibo is awash with talk of pyramid schemes… ‘I've lost count of the people who've been trapped’", said one user. Even the Chinese government acknowledges the number of big cases has shot up, and that organisers are using various channels to lure and cheat unsuspecting Chinese out of their money and assets. Pyramid schemes in China were criminalised in 2005, but are still booming, with the authorities investigating more than 2,800 cases in 2016, a 20% increase from 2015.

South China Morning Post reported: “China’s latest crackdown on pyramid schemes was prompted by three shocking deaths – one young man who was beaten, another found dead in a pond and a third left to die on a road… the three deaths put a spotlight on more extreme tactics used by some organisations in the world’s second largest economy, where the schemes can raise tens of billions of yuan.” There is even a knock-on effect to more traditional multi-level businesses. The Wall Street Journal said “the current crackdown on pyramid schemes has reopened an old debate about U.S. multilevel marketing firms like Herbalife Ltd., which conduct a significant amount of business there.”

The attraction is simple - victims are assured of great fortune if they recruit more investors into the operation. "They give the illusion to naive people that they can get rich quickly without risk. Pyramid schemes rely on attracting a constant stream of new investors… Victims have sunk everything they have - borrowing money and even selling their houses - on the promise of even bigger returns.”

Others point to a reason in modern China for this social problem. Victor Shih, associate professor in political economy and China expert at the University of California San Diego, says: "The rapid proliferation of pyramid schemes is caused by high growth in living costs, especially housing costs, which entice many to look for higher returns - with previously light regulation of the schemes at the local level.”

Now China is carrying out three months of co-ordinated action to investigate and clean-up the practice of pyramid selling. As part of the crackdown, more than 100 arrests were made in southern China in the summer, targeting individuals over their suspected links to a 360m yuan (US$5.5 million) pyramid scheme. Authorities had at least one major bust last year - breaking up a 50bn yuan online finance scam which was suspected of defrauding 900,000 investors.

(Source: British Broadcasting Company and others)

Pray for success for the authorities in China in finding and stopping those who run these pyramid schemes, careless as they are of the wellbeing of those they cheat.

Pray for churches to know how to approach this problem, with their own people and also as a ministry into society to reach folk with the Gospel.

Pray for many to find satisfaction in Jesus and not to be fooled by the lure of a quick fortunes.