April 5-7, 2019
Location: Dongguan, Guangdong
Participants: More than one thousand
On April 5, 2019, more than 1000 moneylenders from various cities gathered in Dongguan, Guangdong. They launched a sit-in protest against the closure of the online peer-to-peer (P2P) lending website tuandai.com. Armed riot police were deployed to forcibly remove the moneylenders and put them onto buses. Protestors feared that their money could never be recovered after the shutdown of the P2P website.
P2P websites act as an intermediary to match borrowers with lenders. Lenders are free to choose borrowers and determine the loan amount through P2P matchmaking sites. In recent years, the websites have gained traction among members of China’s middle class, who often invest their lifelong savings in hope of earning high returns. Some borrowers use loans to venture into businesses or illicit investments in the stock market. Once worth over a trillion yuan, China’s P2P industry began to collapse in 2018. Bad debts, fraud, multiple borrowing, disappearance of borrowers, low credibility of the sites, illegal businesses, and unfavorable market sentiment are among the factors causing the collapse.
Tuandai.com had more than eight million registered users, 220,000 lenders, and 14.5 billion yuan (US$2.15 billion) in outstanding loans as of February 2019. The website was closed by the authorities in March 2019 on the grounds of fraud and illegal fundraising. The owners turned themselves in to the police. As investors were unable to reclaim their money and deposits, they protested in downtown Dongguan, Guangdong, where the firm’s head office was located. Sit-in protesters in front of the city’s government building were forcibly put on buses by riot police, and from there taken into custody. Protesters believed to be Tuandai investors by police were also taken to undergo “psychological therapy.” At the time of writing, it is unclear what kind of treatment the protesters received in the “therapy.”
By the end of May, Dongguan police had arrested over 40 suspects in connection with fraud or illegal fundraising and recorded over 150,000 affected registered users. In conjunction with the investigation, 800 debt collectors from tuandai.com cooperated with police to call and text borrowers to pay off their debts.