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In the dim light of a Monday morning in August 2018, Meng, a 33-year-old woman living near Beijing, began her day with a sense of urgency. Rising at 5:40 a.m., she navigated her morning routine with haste, quietly brushing her teeth, washing her face, and skillfully applying makeup, careful not to disturb her still-sleeping family. Her mission: to reach her neighborhood in time for the 6:15 a.m. company bus that awaited her, marking the start of another workweek.
As a data analyst for a major IT company, Meng traveled from the western suburbs of Beijing to the eastern side, where the company is based, every weekday morning. Navigating Beijing’s notorious morning gridlock, Meng opted for the company bus to remotely clock in, safeguarding against late penalties, even if it took two or three hours each way to the office.
In the midst of her busy day, Meng found solace on the company bus, checking her smartphone’s Daily Wealth app, an investing app that connects users to an online lending platform. The platform, different from a regulated bank, is operated by a mid-sized IT company in competition with thousands of others. Witnessing her savings grow by 200 yuan daily from a 500,000-yuan investment provided a sense of financial security. This autonomous income stream offered respite from the stress of her data analyst job, granting her a measure of control over her well-being. These senses of security and control, largely shaped by semiotic performances in app designs, are essential parts of deception enacted by these platforms.
Despite a comparatively high salary, Meng still felt dissatisfied with her job, mostly from her arduous commutes and intense job pressure. Her mortgage tied her to her current location, which also promised her child a good schooling environment. At her age, promotion hinged on proving her value, yet the threat of layoffs loomed, as the company eyed cost-cutting through the recruitment of cheaper, younger talent for junior roles.
Dreaming of early retirement and an escape from the relentless competition, Meng envisioned a future where investments on Daily Wealth could grant her financial freedom. This aspiration, she discovered, was shared among her colleagues. Many IT professionals, grappling with demanding work hours and the looming specter of being “optimized” before 38, sought avenues to augment their income through financial investments.
A month later, however, her dream turned into a nightmare. One morning, while commuting on her usual bus route, she discovered that she couldn’t access her Daily Wealth account. Desperate for answers, she reached out to her consultant, a former colleague who had introduced her to the platform, but received no response. It wasn’t until she stumbled upon news in her colleagues’ WeChat group that she learned Daily Wealth had been shut down by the police. The platform faced accusations of operating as a Ponzi scheme, generating fake assets to lure in investors, all while managing funds without the required financial license.
The accusation is a familiar one in the landscape of collapsed digital financial platforms in China. Many of these peer-to-peer (P2P) lending platforms, registered as IT companies, offered “innovative” financial solutions to meet the individual needs of lenders and borrowers. Between 2012 and 2015, thousands of P2P platforms emerged, only to crumble within a few years, destroying the life savings of countless middle-class families. Meng’s experience was just one among millions.
Deceive to Survive
P2P lending, which emerged in the United Kingdom in 2005 with the platform Zopa, resembles a dating app. Strangers or acquaintances meet and match with each other to form lending relationships. China’s first P2P platform, PPDai (Paipaidai), emerged in 2007, founded by IT graduates amid limited regulations. However, the model struggled to thrive in China due to credit matching inefficiencies (as one can only collect funds individually) and elevated default risks associated with online private loans.
But after years of exploration, the P2P platforms started to “innovate” their models by acting like unregulated banks, while claiming that they were doing “information” matching. In 2012, they started selling wealth management products, the borrowers’ debts bundled by the platform, to the lenders. This bundling allowed the lending relationships to form more efficiently than by letting the lenders and borrowers wait and match by themselves. Platforms introduced distinct apps for wealth management and credit lending, treating borrowers’ debts as marketable “assets,” with attractive returns for investors. This shift detached investors from the personal aspect of a debt relationship, allowing them to earn 20 to 30 percent annual interest—significantly higher than the 3 to 5 percent offered by traditional banks. This investment could be easily made by anyone with a Chinese bank account through instant money transfers within the application, represented as digital figures. The easily achieved high return, portrayed as unequivocally “safe, professional and lucrative” products, lured investors unaware of the high risk.
The P2P industry thrived in 2014, championing financial inclusion (puhui jinrong) endorsed by the state. This initiative aimed to provide financial services to small businesses, rural residents, and low-income populations. The number of P2P platforms surged from 10 in 2012 to nearly 4,000 in 2015. The absence of proper regulation fueled a competitive cycle, driving platforms to launch aggressive “innovations” like higher interest rates, flexible withdrawals, risk-free trials, and referral bonuses to attract individual investors and secure investments from the capital market. Many claimed to establish security deposit pools, assuring investors could recover funds even in case of borrower defaults, adding an additional deceptive layer, as their insurance capabilities have never been audited by a third party. Platforms, now operating as money schemes, faced immediate bankruptcy risks without sustained “traffic” from potential investors, leading to a surge in unsupported promises masked as financial innovations.
In response to widespread social unrest caused by the collapse of digital Ponzi schemes, the Chinese state intensified regulation in 2017, accelerating the market’s decline. Despite the hope for formal licensing for surviving platforms, many struggled to adapt to new rules. By 2021, the state officially ended all remaining P2P lending platforms to curb risks from spreading to other financial sectors. I conducted fieldwork among Chinese middle-class investors from 2018 to 2021, precisely during the period marked by the industry’s decline, to capture people’s shifting perception of their financial lives. Even amid the industry’s decline, P2P investors unaffected by platform bankruptcy were reportedly “the happiest” in China, per a 2018 China Academy of Social Sciences survey. This curated sense of “happiness” represents a technified financial affect—a deceptive technology that keeps people oblivious to significant potential risks.
For investors facing losses, the collapse of once-thriving P2P platforms felt like a massive betrayal from both platform operators and the state. However, most platform operators and the state did not aim to scam. As the state endeavors to cultivate fintech companies as catalysts for economic stimulation, there lies a strategic imperative for major platforms. These entities, drawing significant capital investment, recognize that formal licensing and regulation offer a pathway to sustained profitability far more reliable than the transient gains derived from illicit schemes. Among the individual investors, early quitters often profited, and initial gains were possible for those who eventually lost money, despite that the financial flows and return guarantees are not closely regulated. While major P2P platforms were not initially designed as scams, the use of deceptive technologies, such as the unfounded guarantees and simulated money growth shown in apps, was necessary to gain investor trust before the platforms could be formally licensed. It is these deceptive technologies, maintaining trust in this transitional space, that pique my interest. They unveil broader insights into the social imaginaries established by digital capitalism and their impact on ordinary users.
As an anthropologist, I witnessed investors navigating deceptive technologies. In initial interviews, they unconsciously reassured themselves, despite other platforms collapsing as Ponzi schemes, that “their” platform would be fine because “it has been operating ever since 2010,” “it was advertised on national TV,” “it was too big to fail,” “it is now ‘compliant’ under new regulations,” or “it is listed on NASDAQ.” The platforms’ grand images serve as a reflection of their own untarnished positive self-images as “smart investors.” In post-loss interviews, some reflected bitterly on their ignorance of their self-deceptions. Meanwhile, others persisted in rejecting the “Ponzi scheme participant” label imposed by the state, asserting, “I am an investor lured by the government for their ‘financial inclusion.’ Now I am part of a crime in their definition.”
These investors were not merely putting their money into a platform; they were also investing their selves in the images reflected by financial technologies and aspirations. Initially, the state empowered individuals to self-identify as “investors,” while granting symbolic authority to P2P platforms as innovative technologies. However, by reclassifying innovations as crimes, the state has disavowed the legitimacy of people’s now “deceptive” identities.
Investing in the Signs of Hope
Reflecting about her trust in Daily Wealth, Meng said, “I could see my money growing on a daily basis and in real-time. Previously there were times when I would try to withdraw some money to my bank account when the investment period ended—and it was often transferred almost instantly! Even if there were delays, I could easily find my former colleague who work for the platform to help speed up the transfer.” Even when she encountered account access issues, which turned out to be caused by police intervention, her immediate reaction was, “Oh, that could be a system bug.” Here, the integration of human and cybernetic systems through app design further solidified people’s belief in the stability and power of P2P platforms.
Meng seamlessly interacted with the app interface, orchestrating visualized signs registering legitimate money (as promising numbers), financial stability (as smooth user experiences), and the prowess of financial technologies, shaping her identity as a “smart investor” (as nimble control over her money). This engagement allowed her to internalize a self-deceptive sense of control over her life in general. Observing stable daily financial gains transformed Meng into a more discerning financial subject, fostering prudent spending habits with an eye on potential savings for a happier future. Confronted with “offline” challenges, such as in relocating and career advancement, and enduring lengthy commutes, Meng found solace and addiction in the smooth mobility of her online financial experience. The deliberately crafted “user experience,” coupled with visual representations of money movements, established a virtual connection, as if these intelligent financial actions were extensions of one’s body.
Digital investment goes beyond placing money in a platform; it’s a social movement enabling Chinese individuals to envision themselves as capable participants in the intricate financial realm. It offers a sense of agency, allowing them to feel “financially included” in China’s progressive movements toward a better future. The sense of agency experienced by investors is shaped by technologies in two key ways: first, technologies aligning with state financial innovation campaigns become positive symbols inspiring people; second, these technologies generate derivative symbols to further naturalize people’s financial desire, fostering better self-imaginations through micro-interactions.
The micro-projects of hope investment are situated within the “financial inclusion” movement emblematic of China’s strategic investment in catalyzing developmental symbols at a macro-level without imposing heavy regulations on new technologies. However, amid this orchestrated drive for progress, a dichotomy emerges. While discerning hopeful symbols as lucrative prospects, many fintech entrepreneurs embark on speculative ventures, harboring aspirations to become China’s “Capital One.” Yet, with unregulated competition, more and more individuals exploit the veneer of hope, engaging in deceptive practices to get rich first. Deception, therefore, unfolds as a complex interplay of symbolic investment among the state, platforms, and people, blurring the boundaries between aspiration and exploitation, all the while shaping China’s financial landscape.