Shoreline Capital, a Guangzhou-based investment firm that invests in distressed assets and provides debt capital in China, looked at more than 700 opportunities to put money to work in China in recent months. It ended up providing capital to exactly four companies, despite the fact that the counterparties on all of the deals were willing to pay returns of at least 25 per cent and offered full collateral backing.

“So many people promise that they will pay us 25-40 per cent per annum and think they can use the funds to make many times their money,” says Ben Fanger, co-founder of Shoreline. “But many of these are overly speculative or even just get rich quick schemes with no actual value being created. To use borrowed money on such inflated promises to pay such returns can be, as the Chinese saying goes, trying to ‘snatch a white wolf with empty hands’.”

Beijing’s recent tight money policy has given rise to ever more money games, speculation, and corruption, though the effects are only now beginning to become evident. Such money games have become a big threat to China’s prosperity and to its social harmony. These games are symptomatic of a society where everyone is on the take, looking for short cuts.