Systemic convictions: China’s fundraising crimes and its financial system

Fundraising crimes are legion in China. And this is not only a criminological observation as the respective provisions of the Criminal Law can be applied in an extremely broad scope of cases, ranging from personal loans or brokering investments for small businesses to platform-based P2P lending operations. Its unclear demarcation produces legal uncertainty that has its root cause not only in vague provisions of the Criminal Law or broad legal interpretations of the judiciary, but also in the systemic function of these crimes. This paper argues that normative analyses about legal (un) certainty and regulatory necessities in the field of illegal fundraising in China need to be widened and additionally include a perspective of political expediency. The financial sector in China is highly dominated by state actors and state-owned banks, which inevitably follow policy directives and form a cornerstone of the regime’s control over the economic system. For the purpose of maintaining this status quo, it is extremely valuable to retain the possibility to criminalize a wide range of financial interactions that would circumvent the state-dominated banking system. Particularly, the crime of “Illegally Absorbing Public Savings” provides the authorities with such a device and should therefore be understood as an important foothold of China’s authoritarian legality in its capital markets. This crime is therefore positioned at the intersection of China’s Leninist notion of ubiquitous control and its market-based economy.