China’s Yixin Wealth, one of the country’s major wealth management and lending platforms, has begun winding down its fixed-income investment products and suspended payments, leaving investors scrambling for answers.
Yixin Excellence Wealth Investment Management Co. Ltd., also known as Yixin Wealth, announced on May 22 that it would begin an “orderly exit” of all of its fixed-income products, including debt-transfer and nonstandard products, according to Chinese financial media outlet Caixin.
The move has affected investors who had expected payments from products they had held for years. Two investors interviewed by The Epoch Times said the platform’s long history of operations and years of regular payments had helped establish a level of trust that made the sudden suspension particularly difficult to anticipate. They spoke on condition of anonymity out of fear of reprisal.
The scale of the fallout remains unclear. Caixin reported that the products involved account for more than 10 billion yuan ($1.5 billion). No official figures are currently available on either the amount involved or the number of investors.
The uncertainty has fueled anxiety among investors, some of whom say they have been unable to obtain a clear explanation or timetable for repayment.
“Basically, there is no information. They just tell you to wait, endlessly wait, and there is no specific timetable or any plan,” said a Wuhan-based investor who had invested in Yixin-related online financial products since around 2015.
Decade of Trust
Yixin was founded in 2006 and listed on the New York Stock Exchange in 2015.
As China moved to dismantle its peer-to-peer lending industry, Yixin shut down its P2P business in 2018 and shifted toward lending facilitation and wealth management. Following the nationwide cleanup of the P2P sector in 2020, the company continued operating in those areas.
The fixed-income products offered through its wealth management business were marketed as relatively stable investments. Such products generally seek to provide more predictable returns than stocks, while carrying more risk than traditional savings and not guaranteeing principal.
Investors who spoke to The Epoch Times said that Yixin’s long operating history and record of making payments were important factors in their decisions to continue investing.
A Shenzhen investor told The Epoch Times that he began investing with Yixin in 2015, initially starting with 1 million yuan ($150,000). He subsequently added to his holdings, eventually investing more than 3.4 million yuan ($505,800).
“I was relatively cautious about investing at first,” he said.
But the platform’s long operating history, recommendations from friends, and repeated introductions to products by Yixin representatives gradually eased his concerns.
At the time, he said, the products offered annual returns of roughly 3 percent to 5 percent.
The Wuhan investor said she had received payments normally for years before the problems emerged on May 22.
“Before the problem appeared, most of the information I saw through public channels was positive,” she said.
That history, she said, made the sudden suspension of payments particularly unexpected.
Investors Left Waiting
Investors said they were not given a clear explanation for the suspension.
The Wuhan investor said that the channels available to investors had become extremely limited and that customer service and other representatives had been unable to provide a concrete solution.
The Shenzhen investor said his understanding is that Yixin used investors’ money to make loans, but that funds were not recovered in time, eventually creating a liquidity crisis that left the company unable to make payments when they came due.
As concerns grew, investors began organizing through WeChat groups to exchange information and discuss possible efforts to recover their money.
The Wuhan investor said he had participated in two groups for affected investors in his area. However, some participants later had their WeChat accounts restricted after discussions in the groups included what he described as critical comments.
“Someone said unpleasant things in the group, and afterward, WeChat was blocked,” he said. “Now we can’t even find these groups of victims.”
For some investors, the financial consequences extend beyond the money placed in Yixin products.
With no clear resolution in sight, both the Wuhan and Shenzhen investors said that some are considering traveling to Beijing to petition the Chinese authorities. Petitioning is an administrative procedure to seek redress of grievances. However, in practice, the authorities routinely harass and persecute petitioners for expressing dissent.
The Epoch Times has reached out to Yixin Wealth for comment.
Li Jing and Gu Xiaohua contributed to this report.
