In Yangshi village in the south central Chinese province of Hunan, villagers debate the fate of their fallen hometown hero Zeng Chengjie. Zeng has been likened by the media to Bernie Madoff. The farmer's-son-turned-entrepreneur was found guilty this summer of defrauding investors in a massive Ponzi scheme similar to the now-disgraced American businessman. However, Zeng's real estate scheme cost him his life.
"He's not the only one who raised money this way," one villager laments around the card table. "Why did he have to be executed?"
It's a question many have been asking across the country: Was Zeng a perpetrator or a pawn of a flawed money system that has become a threat to China and the world?
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China's financial sector has long been controlled by the government. State-owned companies get cash whenever they want, while private companies are largely starved of capital. "[Private companies] don't get access to bank loans," said Fraser Howie, co-author of "Red Capitalism". "As small companies need financing, you have shadow banking developing. It's as simple as that."
In Zeng's case, he moved from his farming village to the city of Jishou, taking advantage of the construction craze there. He built 57 developments using money borrowed from the community—a common practice in China.