New kinds of economic crimes risk stability of financial market, it says

The Ministry of Public Security will conduct a campaign against financial crimes that raise money from the public, including pyramid schemes, in a bid to safeguard economic security and social stability.

The campaign, which was launched on July 25, will last until the end of this year, the ministry said.

“We should assume our responsibility to target such crimes, and improve our investigative capabilities to prevent and resolve economic risks,” said Guo Shengkun, the public security minister, adding that major improvements should come before the opening of 19th National Congress of the Communist Party of China later this year.

The action comes on the heels of a series of pyramid scams and other financial crimes nationwide that resulted in great financial losses and sparked demonstrations that aroused attention from the public and media at home and abroad.

One incident occurred on July 24, when Beijing police warned participants in an illegal gathering that shut down part of a major road.

Protesters complained that the government was unfairly targeting a charity. However, according to Beijing’s Public Security Bureau, participants in the protest had given money to Shanxinhui－a company in Shenzhen, Guangdong province－with the expectation of making a big profit. Shanxinhui is not a real charity, and has been accused of operating a pyramid scheme, it said, adding that the gathering was illegal.

According to the statement, the police persuaded the demonstrators to leave in an orderly manner. Those who led the group and who refused to follow police orders were taken away for further investigation.

Late last week, Chinese police cracked down on Shanxinhui, accusing the company of operating a pyramid scheme and cheating people out of money in the name of raising funds to help the poor.

Zhang Tianming, a representative of the company, and other suspects have been placed under “coercive measures”, which may include summons by force, bail, residential surveillance, detention or arrest.

According to the ministry, new kinds of financial crimes have increased sharply with the rapid development of the internet. They seriously risk the healthy development of the financial market, it said.

“We should remain on high alert and take effective measures to resolutely prevent the financial crimes from turning into a systemic financial risk,” a statement by the ministry said.

During the campaign launched on July 25, police officers will pay attention to combating economic crimes that seriously disrupt financial market order. They will use technical investigative tools to detect and prevent such crimes in a timely manner, the ministry said.

Moreover, the ministry will set up a big-data platform to collect valuable information that can help spot problems and prevent systemic risks. It will also centralize police officers in different areas to target such crimes, it said.