Fraud in China: 5 Ways to Drain Your Cash

Red envelopes are handed out as gifts and blessings. Receiving an invitation to a celebration is often considered as a “red bomb,” as much a burden as an honor. (Law Alan/123RF)
Red envelopes are handed out as gifts and blessings. Receiving an invitation to a celebration is often considered as a “red bomb,” as much a burden as an honor. (Law Alan/123RF)

Fraud in China takes many forms. Even traditions and normal business activities are often fraudulent.

1. Purchasing stocks

During the 20-year span between May 1991 and May 2011, the Chinese stock market rose 26 times, but the secondary market loss was as high as 30 percent, and the total cumulative losses amounted to 2 trillion yuan. The situation is not getting any better. “Sharp Grandfather,” a veteran stock buyer who made his name known on the Internet last year, said he had been investing in the Chinese stock market since nearly its beginning. But rage was the only thing that the 20-year speculation has left him.

2. Depositing to banks

According to the National Bureau of Statistics, China’s CPI (Consumer Price Index) rose 5.4 percent over the year 2011. The latest annual deposit rate for Chinese banks was adjusted to 3.5 percent, which means that the actual purchasing power of any money has decreased by 1.9 percent. That is, a $10,000 deposit will result in a loss of $190 after one year. In the early 1970s, with 10 yuan one could buy 14.3 pounds of pork; whereas now it has shrunk to less than a pound.

3. Getting sick

A serious illness of a family member will financially break a family. Medicine prices in China are not consistent with other countries, and are much higher in many cases. For example, Herceptin, which is used for the treatment of breast cancer, is sold for 24,500 yuan in the mainland, while it is only 14,800 yuan in Hong Kong for the same package. The price difference between the two places, which are separated only by a river, is shocking to the people in the mainland.

fraud in china

A serious illness of a family member will financially break a family. Medicine prices in China are not consistent with other countries, and are much higher in many cases. (ragnarocks/123RF)

4. Fraud

In China, the most profitable industry is in fact fraud. It is seen everywhere in society, from street cons to Internet swindles, text message cons to fake marriages, human trafficking to a myriad of other types of schemes. It is reported that illegal profits through fraud and cons amount to more than 300 billion yuan annually in China.

5. Red envelopes

Giving red envelopes is a long-standing tradition rooted in the Chinese culture. On many occasions, such as weddings, having babies, moving, promotion, and the Chinese Lunar New Year, red envelopes are handed out as gifts and blessings. The envelope usually contains cash. Receiving an invitation to a celebration is often considered as a “red bomb,” as much a burden as an honor.

Red envelopes are also a way to show “one good turn of friendly intention.” Many parents will give money to their children’s school teachers, hoping they will give their children special attention at school. According to media surveys, 60 percent of parents did not want to give teachers gifts, but in reality, 70 percent of them ended up doing it. The red envelope has definitely become a heavy weight on the Chinese people.

fraud in china

Red envelopes are handed out as gifts and blessings. Receiving an invitation to a celebration is often considered as a “red bomb,” as much a burden as an honor. (Law Alan/123RF)

Source: SecretChina

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