Regulating China's Shadow Banking System Isn't Easy

The country’s massive informal lending market resists regulation
The opening of an experimental private lending center in Wenzhou last year failed to bring informal borrowing under control. Other than the brokers, it sits empty most days Photograph by Zhuang Yingchang/Xinhua/Zuma Press

On a morning in March, row after row of chairs in the waiting room of Wenzhou Private Lending Registration Service Center sit empty. Zhou Xiang, a manager at one of the five government-sanctioned loan brokers operating in the center, which opened in 2012, hasn’t had a single customer today. “The volume of lending is so low we ourselves won’t be here long without expanding into some other businesses,” he says.

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