ABSTRACT
This chapter presents the legal framework regulating private lending activities under China’s socialist legal system. It introduces the changing attitudes of Chinese authorities towards private financing activities from the 1990s to the present time. The chapter examines civil laws regarding private lending agreements. It describes two sets of regulations to control interest rates in the private lending market and evaluates whether they are effective in limiting usuries and protecting debtors. The chapter looks at the criminal liabilities of conducting illegal money lending practices, in particular, the offence of fraudulent fundraising under Chinese criminal code. When the legislator made the criminal code in 1997, it designed a series of financial crimes with the primary objective to combat illegal financial practices and protect the integrity and stability of the financial system. The chapter analyses two criminal cases of Mr Zeng Chengjie and Ms Wu Ying to see how judges apply the law in judicial practice.
