China to tighten crackdown on illegal fundraising to curb financial risks

BEIJING - China will tighten its crackdown on illegal fundraising to fend off financial risks in 2018, according to an inter-agency anti-illegal fundraising meeting.

China will strengthen supervision mechanism for illegal fundraising, hold local government officials accountable, and improve the legal system and public education in 2018.

Key fields including online lending, property and rural cooperatives will be under greater scrutiny.

Rising illegal fundraising has been contained thanks to efforts against high-profile cases.

China saw 5,197 illegal fundraising cases in 2016, involving 251.1 billion yuan ($39.8 billion), down 14.48 percent and 0.11 percent year-on-year, respectively, official data showed.

Despite the progress, eastern coastal areas, central and western regions with large populations are still vulnerable to fraud.

Internet finance has grown as investors seek higher returns than bank deposits while small businesses secure funds through online brokers. But risks have piled up as regulations cannot keep up with the pace of development.

Among high-profile fraud cases in the past years, Ezubao, an online peer-to-peer lending platform, cheated the public out of nearly 60 billion yuan through fake investments.