Speaker: Dr Keming Yang (Durham)
Date: 27 October 2015
Venue: S2.77 (Social Sciences Building)
Summary: Whilst informal finance has been indispensable for the growth of private enterprises in post-Mao China, there has been little well-evidenced research on the risks and the damages it has created when informal financing relations break down. As most cases involve a large sum of money (hundreds of millions to billions of yuan) and a large number of people (up to tens of thousands), the damages caused are far beyond financial losses. Drawing on the analysis of two hundred and thirty-one cases reported in Chinese media and other sources, we firstly provide an ideal type and an overview of the defaulted informal financing schemes and then identify some plausible social and institutional causes behind their default. Formalizing China’s informal economy and finance, we conclude, is inevitable in order to minimize any further damages in the future.