Walk away from promises of high, guaranteed or certain returns
In 2018, a Chinese regulator cautioned that returns above 6% deserve scrutiny, above 8% are dangerous, and above 10% can mean losing all principal. Regulated asset-management products may not promise principal or returns. Chinese rules place losses from participation in illegal fundraising on participants, without a guaranteed bailout.
What it takes
Free. Pause when you hear those promises.
What you may gain
At the 2018 Lujiazui Forum, then banking and insurance regulator Guo Shuqing gave the 6%, 8% and 10% warning thresholds. China's asset-management rules prohibit promises of principal or return guarantees and prohibit institutions from advancing money to redeem products facing payment difficulties. The 2021 illegal-fundraising regulation states that participants bear their own losses.
Context & considerations
The 6%, 8% and 10% thresholds were practical cautions from a regulator, not statutory boundaries. Verification pending in the source: the original regulator's dynamically loaded speech page could not be retrieved, so the quotation relies on Tianjin's republication. This is not investment advice.
Research & references
Guo Shuqing's speech at the 10th Lujiazui Forum, June 2018, reproduced by Tianjin's financial administration. https://jrgz.tj.gov.cn/ztlm/ztzl/jrjfwphjr/202006/t20200625_2744709.html ; People's Bank of China and other agencies (2018). Guiding Opinions on Regulating Financial Institutions' Asset Management Business, Yinfa [2018] No. 106, Articles 2 and 6. https://www.gov.cn/gongbao/content/2018/content_5323101.htm ; State Council of China (2021). Regulations on Preventing and Handling Illegal Fundraising, Order No. 737, Article 25. https://www.gov.cn/gongbao/content/2021/content_5588815.htm