Tuesday February 19, 2019
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China Issues An Advisory To Its Citizens About Travel To Canada

The retrial prompted Canada to update its travel advisory for China, warning citizens to "exercise a high degree of caution in China"

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The Canadian national flag flies above the Canadian embassy in Beijing, China, Jan. 15, 2019. VOA

China issued an advisory to its citizens Tuesday, urging them to “fully assess the risks of travel” to Canada after a Chinese executive was arrested in the North American country.

China’s Foreign Ministry said Canada recently “arbitrarily detained” a Chinese national, a reference to Chinese executive Meng Wanzhou.

Meng, the chief financial officer at Huawei, a global telecommunications conglomerate, was arrested on December 1 at the request of the United States.

Meng was charged with conspiring to defraud banks through transactions that violated U.S. sanctions against Iran. She denies the allegations.

 

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People are escorted out of the court registry by a B.C. sheriff after the B.C. Supreme Court bail hearing of Huawei CFO Meng Wanzhou, who was released on a $10 million bail in Vancouver, British Columbia, Canada. VOA

 

Meng was released on bail in Vancouver and could be extradited to the U.S.

The travel advisory is the latest sign of escalating tensions between Canada and China.

Two Canadian citizens were detained in China after Meng’s arrest. And on Monday, a court in northeastern China sentenced Canadian Robert Lloyd Schellenberg to death for drug smuggling in a hastily-arranged one-day retrial. Schellenberg had been sentenced to 15 years in prison back in November on the drug conviction.

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China has denied the trials are linked to Meng’s situation.

The retrial prompted Canada to update its travel advisory for China, warning citizens to “exercise a high degree of caution in China due to the risk of arbitrary enforcement of local laws.” (VOA)

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Chinese Police Catches Hold of $1.5 Billion Money in Online Lending Scandal

The internet has helped financial platforms attract money from financial novices with little knowledge of the risks involved.

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China
Chinese policemen watch as depositors from Ezubao gather outside the State Bureau for Letters and Calls Reception Division office in Beijing, Jan. 1, 2016. China's policy ministry says it investigated 380 online lenders following an avalanche of scandals. VOA

Chinese police have investigated 380 online lenders and frozen $1.5 billion in assets following an avalanche of scandals in the huge but lightly regulated industry, the government announced Monday.

Beijing allowed a private finance industry to flourish in order to supply credit to entrepreneurs and households that aren’t served by the state-run banking system. But that threatens to become a liability for the ruling Communist Party after bankruptcies and fraud cases prompted protests and complaints of official indifference to small investors.

The police ministry said it launched the investigation because person-to-person, or P2P, lending was increasingly risky and rife with complaints about fraud, mismanagement and waste.

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The police ministry said it launched the investigation because person-to-person, or P2P, lending was increasingly risky and rife with complaints about fraud, mismanagement and waste. Pixabay

The ministry gave no details of arrests but said more than 100 executives were being sought by investigators and some had fled abroad. It said authorities seized or froze 10 billion yuan ($1.5 billion) but gave no indication how much might be returned to depositors.

Police say some lenders and investment vehicles were brazenly fraudulent, while others collapsed after inexperienced founders failed to manage risk.

Monday’s statement said P2P lenders were investigated for complaints including wasting money, reporting phony investment plans and using illegal tactics to raise money.

Lending through online platforms grew by triple digits annually until 2017 when regulators tightened controls.

Depositors lent 1.9 trillion yuan ($280 billion) last year, but that was down by 50 percent from 2017, according to the Shenzhen Qiancheng Internet Finance Research Institute.

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The internet has helped financial platforms attract money from financial novices with little knowledge of the risks involved. Pixabay

The outstanding loan balance stood at 1.2 trillion yuan ($177 billion) at the end of 2018, down 25 percent from a year earlier, according to Diyi Wangdai, a web site that reports on the industry.

P2P lenders are part of a privately run Chinese finance industry the national bank regulator estimated in 2015 had grown to $1.5 trillion.

The internet has helped financial platforms attract money from financial novices with little knowledge of the risks involved.

Many lend to factories and retailers or invest in restaurants, car washes and other businesses. But inexperience and poor risk control means a downturn in business conditions can bankrupt them.

Also Read: Sales of Smart Feature Phones Expected To Be About $28 Billion Over Next Three Years

Finance as a whole has come under tougher scrutiny after a 2015 plunge in stock prices led to accusations of insider trading and other offenses.

In one of China’s biggest financial scams, authorities say depositors lost 50 billion yuan ($7.7 billion) in online lender Ezubo before it was seized by regulators in 2015.

The founder and his brother were sentenced to life in prison in 2017. (VOA)