Transcript: Ep. 2 - Feeding Personal Wealth | Oct 02, 2018

A caption reads "NHK Documentary."

At a meeting, a company owner says "These are China's first mass-produced, one-piece virtual reality glasses."

A woman in her forties says "Do you have any competitors?"

The owner says "No, only we've commercialized them."

The narrator says THE NARRATOR SAYS THIS WOMAN IS THE
CO-OWNER OF A CHINESE
INVESTMENT COMPANY.
SHE'S CONSIDERING WHETHER TO
PROVIDE FUNDING TO THIS TECH
START-UP.

The woman says "How much do you want?

The owner says "To be frank, 41 million US dollars. It would accelerate the development of the future."

Two men bang the gong at the stocks market.

(GONG BANGING)

The narrator says IN CHINA NOW, 12,000 START-UPS
ARE BEING CREATED EVERY DAY.
THEY ARE SPRINGING UP ONE AFTER
ANOTHER IN NEXT-GENERATION
INDUSTRIES, AIMING FOR A STOCK
LISTING.
AND FLOWING INTO THESE VENTURES
IS AN ESTIMATED 17 TRILLION US
DOLLARS IN PERSONAL ASSETS.
IT'S A SURGING INVESTMENT BOOM
THAT HAS TAPPED INTO THE
POCKETBOOKS OF 1.4 BILLION
PEOPLE.
FUELLING THIS TREND ARE NEW,
PRIVATE-SECTOR INVESTMENT
COMPANIES.
WITH SOME INTERESTS AS HIGH AS
30 percent PER ANNUM, THEY ARE MAGNETS
FOR MONEY FROM WEALTHY
INDIVIDUAL INVESTORS.

A man with glasses says "If you invest 11 million dollars, how long would we have to repay?"

The woman says "Within six months, of course."

The man says "That's impossible."

The woman says "Products can be excellent, but it's profits that matter."

The narrator says MOVING ALL OF THIS CAPITAL ARE
NEW FINANCIAL SERVICE
BUSINESSES, WHICH USE THE
INTERNET TO GATHER MONEY.
THIS COMPANY PROMISES AN ANNUAL
INTEREST RATE OF 9 percent,
GUARANTEEING THE PRINCIPAL
INVESTMENT AND INTEREST.

A woman points at a screen and says "Funding raised 100 percent."

A man says "How long did it take?"

The woman says "20 minutes."

(PEOPLE YELLING)

The narrator says BUT IT'S NOT ALL SMOOTH SAILING
IN THIS RED-HOT BOOM.
(PEOPLE ARGUING)

A clip shows troubles in a crowd. A woman is pushed to the ground and she says "What a terrible thing to do!"

(WOMAN CRYING)

The Chinese flag flies.

The narrator says CHINA WANTS TO SHED ITS LABEL
AS THE WORLD'S FACTORY AS IT
PURSUES NEW GROWTH INDUSTRIES.
BUT WILL THE PERSONAL ASSETS OF
1.4 BILLION PEOPLE TRIGGER THE
COUNTRY'S NEXT ROUND OF GROWTH?
NOW CHINA IS CONDUCTING AN EPIC
EXPERIMENT: UNITING THE PUBLIC
AND PRIVATE SECTORS.
WE FOLLOW THE TIRELESS DESIRE
FOR GROWTH OF THE GREAT DRAGON.

Chinese symbols appears as an animation shows a dragon twirling and spotting fire. The name of the show reads "China. The great dragon. Feeding personal wealth to growth industries."

The narrator says THE NARRATOR SAYS THIS IS THE PUDONG
NEW DISTRICT IN THE CITY OF
SHANGHAI, KNOWN AS CHINA'S
FINANCIAL CAPITAL.
IT IS SAID THAT FINANCIAL
DEALINGS IN PUDONG EXCEED 270
BILLION DOLLARS A DAY.
THE DISTRICT IS LIKE A PUMPING
HEART, INJECTING THE LIFEBLOOD
OF MONEY INTO THE CHINESE
ECONOMY.
SOME 6,000 FINANCIAL
INSTITUTIONS, INCLUDING MAJOR
STATE-OWNED BANKS, JOCKEY FOR
SPACE AND BUSINESS IN THIS
DISTRICT; THEIR FINANCIAL CLOUT
CLIMBING AS PUDONG'S PROFILE
GROWS.
(MUSIC PLAYING IN BACKGROUND)
THE NEW FORCE EMERGING IN
PUDONG ARE PRIVATE-SECTOR
INVESTMENT COMPANIES.
A NUMBER OF INVESTMENT
COMPANIES GATHERED ON THIS DAY
TO LOOK FOR PROMISING START-UPS
IN THE FIELD OF VIRTUAL
REALITY.

At a conference, a speaker says "As all of you know, for investors, for entrepreneurs, virtual reality is now the hottest, most attention-grabbing industry."

The narrator says VIRTUAL REALITY IS EXPECTED TO
EXPLODE INTO A 70 BILLION
DOLLAR INDUSTRY WORLDWIDE
WITHIN FOUR YEARS, AND
INVESTMENT COMPANIES ARE ALL
ANGLING FOR A PIECE OF THE
MARKET.
MANY OF THE OWNERS ARE IN THEIR
20S AND 30S, WHO COLLECT THEIR
INVESTMENTS IN THE MILLIONS OF
DOLLARS.
AND THEY'RE ALL VYING HARD TO
PUT MONEY INTO UP-AND-COMING
VENTURES.

A young company owner says "Our target is only virtual reality. We've already invested in the companies introduced today."

The narrator says THE HOTTEST ITEM SHOWN AT THIS
EVENT IS A VIRTUAL DATING GAME.

A clip show on a big screen shows a user on a date with a virtual character.

The narrator says INVESTMENT COMPANY CO-OWNER,
PAN XIAOXI, IS ALWAYS ON THE
LOOKOUT FOR A PROMISING
START-UP.

A caption reads "Pan Xiaoxi. Co-owner, Huahui Group."

Pan is in her forties, with long straight black hair in a braided half-do and wears a white blouse with lace details and a headband.

(VIDEO GAME CHARACTER GIGGLING)

Pan says "I liked one start-up. I may contact and invest in them. The one where the guy asks the girl for a date."

Later, Pan gets off a car. A person opens the door for her and says "Good morning."

The narrator says PAN XIAOXI IS A RARE BREED IN
THIS FINANCIAL HUB, WHERE FEW
WOMEN HOLD SENIOR POSITIONS.
SHE HAD A STRONG DESIRE TO
CONTRIBUTE TO CHINA'S
TREMENDOUS GROWTH.
FOUNDED IN 2012, THE BUSINESS
WAS NAMED THE HUAHUI GROUP,
WHICH MEANS "BRILLIANT CHINA."
THE FIRM EMPLOYS 50 PEOPLE.
THEY INVEST MILLIONS OF DOLLARS
IN HIGH-TECH COMPANIES AND
PROFIT BY GETTING THOSE
COMPANIES LISTED ON STOCK
EXCHANGES.
THEIR FINANCIAL BACKING COMES
FROM THE WEALTHY.
RICH INVESTORS AND BUSINESS
OWNERS, FOR EXAMPLE.
THE HUAHUI GROUP STARTED WITH
45 MILLION DOLLARS IN CAPITAL;
IT HAS TRIPLED THAT TO 136
MILLION DOLLARS.
PAN SAYS SHE IMPOSES AN ANNUAL
INVESTMENT YIELD THRESHOLD ON
HERSELF OF 30 percent.
TODAY, SHE'S HAVING A MEETING
WITH A CO-OWNER WHO'S PROPOSING
AN INVESTMENT IN A
TOP-OF-THE-LINE TILE
MANUFACTURER.

The caption changes to "Li Yudong. Co-owner, Huahui Group."

Li is in his thirties, clean-shaven and with short black hair. He wears a white shirt.

At the meeting, Li says "We need to invest 8 million dollars."

Pan says "8 million?"

Li says "Yes, 8 million."

Pan says "Are they listed."

Li says "They're preparing to."

Pan says "If we invest that 8 million in another project, how much of a return could we get. You really want to invest in this old industry?"

Li says "It's quite possible they'll list on the Shanghai Stock Exchange."

Pan says "We can't talk about probabilities. We're investing our clients' money."

The narrator sasy PAN PAYS ATTENTION TO ONE
FACTOR MOST OF ALL WHEN SHE
INVESTS: WHETHER A COMPANY HAS
HIGH GROWTH POTENTIAL OR NOT.
THE COMPANY SHE'S LOOKING AT
MAY BE STABLE, BUT SHE WON'T
INVEST IN OLD INDUSTRIES THAT
GENERATE LOW RETURNS.
SHE'S ONLY INTERESTED IN
HIGH-RISK, HIGH-RETURN
INVESTMENTS.
SHE'S DECIDED TO GIVE THIS
VENTURE FURTHER STUDY.
(HORNS TRUMPETING)

The Chinese flagflies.

The narrator says THE DESIRE OF THE CHINESE
GOVERNMENT TO SEARCH FOR NEW
AVENUES OF GROWTH IS BEHIND THE
COUNTRY'S INVESTMENT BOOM.
(MARCHING BAND PLAYING)
CHINESE LEADERS WANT TO MOVE
FROM MANUFACTURING THAT GROWTH
TO INNOVATION, TURNING THEIR
NATION INTO A SELF-INNOVATING
ECONOMY THAT WILL CREATE
CUTTING-EDGE TECHNOLOGIES AND
BUSINESSES.
TO DO THAT, THE GOVERNMENT HAS
DESIGNATED 10 GROWTH AREAS IN
WHICH CHINA WILL DEVELOP CORE,
NEXT-GENERATION INDUSTRIES.

A caption on screen reads 'Made in China 2025. New advanced information technology. High-end numerical control (NC) machine tools and robotics. Aerospace equipment. Ocean engineering equipment and high-tech ships. Modern railway equipment. Energy saving and new energy vehicles
Power equipment. Agricultural machinery. New materials. Biopharmaceutical and high performance medical devices."

(APPLAUSE)

The caption changes to "Li Keqiang. Premier of China."

Li is in his sixties, with short black hair and wears glasses, a blue suit, white shirt and polka dotted red tie.

Li says "We'll generate passion for mass entrepreneurship and technical innovation. They will be the great drivers for growth."

The narrator says THIS STRATEGY HAS LED TO ISSUES
SURROUNDING THE FUNDING NEEDED
TO FOSTER GROWTH INDUSTRIES.

An animation shows the issues as the narrator says INVESTMENT FROM STATE-OWNED
BANKS AND OVERSEAS INVESTORS
FUELLED CHINA'S ECONOMIC GROWTH
IN THE PAST.
THAT FUNDING FLOWED INTO
STATE-OWNED ENTERPRISES AND
JOINT VENTURES, REVVING UP THE
COUNTRY'S MANUFACTURING ENGINE.
HOWEVER, THAT ENGINE HAS SLOWED
DOWN, DECELERATING FOREIGN
INVESTMENT, AND STATE-OWNED
BANKS HAVE REACHED THEIR LIMIT
JUST TRYING TO SUPPORT EXISTING
INDUSTRIES.
THAT'S WHY THE GOVERNMENT IS
FOCUSED ON THE ESTIMATED 17
TRILLION DOLLARS IN PERSONAL
ASSETS HELD BY CHINESE
CITIZENS.
THE PROBLEM IS HOW TO GET THAT
MONEY TO THE GROWTH INDUSTRIES.
GOVERNMENT OFFICIALS CAME UP
WITH A NEW IDEA.
CHANNEL THE MONEY BY INCREASING
THE NUMBER OF PRIVATE-SECTOR
INVESTMENT COMPANIES, WHICH HAD
BARELY EXISTED UP TO THEN.
THEY ENACTED A NEW LAW TO
ENCOURAGE THE ESTABLISHMENT OF
INVESTMENT FIRMS.
AND UNLIKE MOST ADVANCED
NATIONS, CHINA DIDN'T STRICTLY
REGULATE FINANCIAL
INSTITUTIONS, GRANTING THEM
CONSIDERABLE LEEWAY AND
FREEDOM.

A caption reads "Encourage the establishment or investment firms."

The narrator says AS A RESULT, THE NUMBER OF
INVESTMENT COMPANIES INCREASED
RAPIDLY FROM 2013.
NOW IT'S ESTIMATED THERE ARE
MORE THAN 22,000.
THE GOVERNMENT ALSO BOOSTED
THESE FIRMS' INVESTMENTS BY
GIVING THEM PREFERENTIAL TAX
BREAKS AND OTHER INCENTIVES.

The caption changes to "Preferential tax policy."

The narrator says IN RESPONSE, INVESTMENT
COMPANIES BEGAN PILING FUNDS
INTO START-UPS.
THESE INVESTMENT FIRMS NOW HOLD
THE KEY TO THIS NEW POSSIBLE
DRIVER OF GROWTH FOR CHINA.
(SPEAKING INDISTINCTLY)
THE NEXT TIME WE LINK UP WITH
PAN XIAOXI, SHE'S MAKING A MOVE
TO INVEST IN THE VIRTUAL DATING
GAME START-UP SHE SAW AT THE
EVENT.
THE COMPANY HAS BEEN IN
BUSINESS FOR ONLY TWO YEARS.

Pan talks to an employee and says "Is this a simulation?"

The employee says "Yes, it is."

Pan looks a young female character and says "This character made a big impression."

The narrator says VIRTUAL REALITY IS RELATED TO
THE 10 BIG-GROWTH INDUSTRIES
DESIGNATED BY THE GOVERNMENT.
IT'S AN AREA PAN IS FOCUSED ON.

Pan says "So you two are the founders?"

A young owner says "Yes, the two of us."

(CHARACTER SPEAKING IN FOREIGN
LANGUAGE)

The narrator says BEFORE INVESTING IN A COMPANY,
PAN ALWAYS MEETS THE TOP
MANAGEMENT.
SHE WANTS TO MAKE SURE THEY
REALLY DO HAVE CONFIDENCE IN
THEIR TECHNOLOGY.
(CONVERSING IN FOREIGN LANGUAGE)
(CONVERSING IN FOREIGN LANGUAGE)

Pan says "Once the game is released, can investment be recovered quickly?"

The owner says "Apart from whether it will be a huge hit or not, we're sure it will attract attention."

Pan says "It's all right to attract attention, but we want a return as soon as possible."

The owner says "Investing in virtual reality is investing in the future. If you want a return really fast, invest in another game."

The other owner says "You have to realize and understand this if you invest in us."

The narrator says PAN LIKES THE FACT THAT THESE
ENTREPRENEURS DID NOT LOSE
THEIR CONFIDENCE IN THE FACE OF
HER CHALLENGE.

The interviewer says "Will it go well?"

Pan says "Absolutely. We'll succeed. I've never failed yet with an investment."

The narrator says PAN STUDIED OVERSEAS AND WENT
TO GRADUATE SCHOOL IN THE UK.
BUT SHE MAJORED IN ART AND
LEARNED ABOUT INVESTMENT ON HER
OWN.

In front of a PC, Pam points at the screen and says "This is the website of the China Youth Returnee Association."

The narrator says THIS IS ONE OF PAN'S WEAPONS
FOR HER INVESTMENT ACTIVITIES:
THE NETWORK OF 600,000 MEMBERS
OF THIS RETURNEE ASSOCIATION.
THE CHINESE LEADERSHIP HIGHLY
REGARDS YOUNG PEOPLE WHO HAVE
STUDIED ABROAD, CONSIDERING
THEM THE NEW DRIVING FORCE THAT
WILL SPUR ENTREPRENEURSHIP AND
INNOVATION.

Pan points at a smartphone screen and says "That's me."

The narrator says PAN SERVES AS THE HEAD OF ONE
OF THE ASSOCIATION'S BRANCHES,
OVERSEEING SOME 20,000 MEMBERS.
SHE'S GOTTEN MANY OF HER
CLIENTS AND INVESTMENT TARGETS
FROM THIS NETWORK.
THE BUSINESS OF INVESTMENT IS
DRIVEN BY THE UNSEEN POWER OF
PERSONAL CONNECTIONS UNIQUE TO
CHINA.

Pan says "As branch head, I'm given preferential treatment. I get information not normally available. I participate in big government meetings, so I can make connections with officials. I'm really thankful for this network."

The narrator says CHINA'S PERSONAL ASSETS ARE
POURING INTO GROWTH INDUSTRIES
THROUGH VARIOUS TYPES OF NEW
INVESTMENT COMPANIES.
A NEW FRONTIER FOR SECURING
THESE PERSONAL ASSETS IS THE
BUSINESS OF INTERNET FINANCE.
THE BUSINESS HAS EXPLODED SINCE
IT FIRST APPEARED A FEW YEARS
AGO.
RIGHT NOW, ACROSS CHINA, MORE
THAN 2,000 COMPANIES ARE MOVING
NEARLY 90 BILLION DOLLARS.

An ad reads "Experience investment Get 200 yuan (30 dollars) bonus."

Another ad reads to "Invest 100,000 yuan. Get 300 yuan cash back."

The narrator says RETURNS ARE HIGH AND CAN BE UP
TO 13 percent ANNUALLY OR MORE.

PERSONAL INVESTORS HURT BY THE
VOLATILITY OF THE STOCK MARKET
ARE STAMPEDING TO THIS
BUSINESS.

A woman in her fifties says "My husband invested 13,000 dollars in stocks
and made nearly 48,000 dollars. We sold our house to sink it into stocks. But then stock prices fell to one-fourth their value. The 220,000 dollars we got for selling the house went up in smoke. We also put our salaries into stocks. That's why we gave up stocks and moved to this business."

The narrator says ONE COMPANY THAT HAS ATTRACTED
ATTENTION, A PIONEER OF
INTERNET FINANCE, IS LOCATED IN
THE FINANCIAL HUB OF PUDONG.

A man comes out of an elevator.

Another man says "Any other people down below?"

The man says "Yes, more to come."

The narrator says RONGDAO WANG IS BEING FLOODED
BY DELEGATIONS FROM AROUND THE
COUNTRY WANTING TO SEE ITS
OPERATIONS.
ON THIS DAY, THEY ARE WELCOMING
A GROUP OF BRANCH MANAGERS OF
CONVENTIONAL BANKS FROM
GUANGDONG PROVINCE.
RONGDAO WANG IS BEING DRIVEN BY
THE VIGOUR OF YOUTH.
ITS 200 EMPLOYEES HAVE AN
AVERAGE AGE OF 29.
THEIR SELLING POINT IS SPEED.
THEY CAN ATTRACT MONEY VERY
FAST.
AT FIRST, THEY POST INFORMATION
ON THE INTERNET ON COMPANIES
THEY'VE PREVIOUSLY VETTED.
USUALLY, THEY CAN COLLECT
FINANCING RELATIVELY EASILY FOR
LOANS IN THE 10,000 DOLLAR UNIT
RANGE.
IN THIS CASE, THE ANNUAL RETURN
IS 9 percent.
REPAYMENT COMES IN 12 MONTHS.
PLUS, THE ORIGINAL INVESTMENTS
AND THE INTEREST ARE 100 percent
GUARANTEED.
THEY ARE SEEKING INDIVIDUAL
INVESTMENTS TOTALLING 14,000
DOLLARS.
AS SOON AS THEY START PROMOTING
A COMPANY, THEY IMMEDIATELY
BEGIN BRINGING IN THE MONEY.

An employee points at a computer screen and says "We've already collected 60 percent. Another 1,300 just came in."

The narrator says THEY ARE COLLECTING MONEY
HAND-OVER-FIST.

The employee says "This one is closed. It took 40 minutes to reach 100 percent."

The narrator says EIGHT PEOPLE INVESTED.
IT'S RARE FOR THE FINANCING TO
TURN SOUR.
ONLY ABOUT THREE CASES IN EVERY
1,000.
IN THOSE INSTANCES, RONGDAO
WANG MAKES UP THE LOSS.
THIS TYPE OF LOAN BUSINESS IS
REGULATED IN MANY OTHER
COUNTRIES.
IN CHINA, ANYONE WITH A
SMARTPHONE CAN EASILY
PARTICIPATE IN THESE
TRANSACTIONS.

The employee operates her smartphone and says "I'm also investing. Only about 4,600 dollars because I don't have the money."

(CHUCKLING)

As an animation shows the investment flow, the narrator says THE MONEY BEING RAISED IN THIS
WAY WILL BE LENT AS FINANCING
TO COMPANIES IN GROWTH
INDUSTRIES.
A 2 percent COMMISSION FEE IS ADDED
ON WHEN THE MONEY IS PAID BACK.
THAT'S RONGDAO WANG'S PROFIT.
CONVENTIONAL FINANCE COMPANIES
CAN SECURE FUNDING IN A MONTH.
BUT RONGDAO WANG CAN DO IT IN A
WEEK.
OR EVEN JUST TWO HOURS.
IT'S THIS SPEED THAT ALLOWS
RONGDAO WANG TO OFFER SMALL
LOANS TO MANY COMPANIES AND
THUS FUEL ITS OWN DRAMATIC
RISE.
ZHOU HAN IS THE COMPANY'S
FOUNDER.
HE'S CREDITED WITH INTRODUCING
INTERNET FINANCING FOR
COMPANIES LOOKING FOR FUNDING.

The caption changes to "Zhou Han. CEO, Rongdao Wang."

Zhou is in his forties, with short graying hair and wears black trousers and a white shirt.

The narrator says ONCE A CHIEF FINANCIAL OFFICER
FOR A LARGE MANUFACTURER, ZHOU
LEARNED ABOUT THE FINANCIAL
DIFFICULTIES SUBCONTRACTORS
WERE HAVING.
THIS PROMPTED HIM TO ESTABLISH
RONGDAO WANG IN 2009.

Zhou says "Yesterday we made more than 1.8 million dollars in loans."

The interviewer says "Are the amounts increasing?"

Zhou says "They're soaring."

The narrator says THEIR TARGETS ARE PROMISING
SMALL-TO-MEDIUM ENTERPRISES,
OR SMES, IN CHINA'S GROWTH
INDUSTRIES.
UP TO NOW, THEY'VE OFFERED
FINANCING TO SOME 10,000
COMPANIES.

Zhou says "China's private-sector companies make up 99 percent of all companies. They provide 80 percent of urban employment, account for 60 percent of GDP, and pay 50 percent of the taxes. Despite that, they receive less than 30 percent of all financing. We mobilize the power of people who have assets, and support the private-sector companies that are contributing to economic growth."

The narrator says NOW, MORE THAN 2,000 COMPANIES
ARE ENGAGED IN ONLINE
FINANCING, WHICH HAS BECOME A
DRIVING FORCE IN THE WORLD OF
INVESTMENT.

The caption changes to "Meeting of Internet finance industry groups."

The narrator says THE CHINESE GOVERNMENT IS
PLACING EVER-GREATER
EXPECTATIONS ON THE POWER OF
THESE COMPANIES TO MOBILIZE
CAPITAL.

The caption changes to "Vice-chairman, Shanghai Municipal Economic and Informatization Committee."

The vice-chairman gives a speech and says "Our country is in the midst of
a major industrial transformation. Please take hold of this chance to become part of the force driving growth. I hope for your success in this new era of growth."

The narrator says GIVEN ITS LEADING POSITION IN
THE FIELD OF INTERNET
FINANCING, RONGDAO WANG
RECEIVED AN UNUSUAL MISSION IN
2014 FROM THE CITY OF SHANGHAI.

Zhou shows a picture of several business men and says "This photo is from 2014, when Shanghai showed interest in our activities."

The camera zooms in the picture and a caption reads "Shanghai vice-mayor."

The narrator says SHANGHAI OFFICIALS ASKED
RONGDAO WANG TO HELP FOSTER
CHINA'S GROWTH INDUSTRIES.
GROUND ZERO WAS THE BAOSHAN
DISTRICT IN SHANGHAI.
IT'S ONE OF CHINA'S LEADING
STEEL TOWNS.
SHANGHAI OFFICIALS WANTED
RONGDAO WANG TO REVITALIZE
SMALL AND MEDIUM-SIZED
CONTRACTORS IN THE STAGNATING
HEAVY INDUSTRY.
THEY ASKED ZHOU TO FIND
COMPANIES THAT COULD THRIVE IN
GROWTH INDUSTRIES AND HELP THEM
WITH FINANCING.

Zhou says "SMEs in this area subcontracted for state-owned steel companies. But with steel companies retrenching, the subcontractors had to change. Our role is to provide the necessary financing for them to do that."

The narrator says TODAY, ZHOU IS CHECKING OUT A
SMALL STEEL WORKS COMPANY.

The caption changes to "Wu Ming. Vice president of steelworks company."

Wu is in his fifties, balding and clean-shaven. He wears glasses, jeans and a black T-shirt.

(CONVERSING IN FOREIGN LANGUAGE)

The narrator says FOR MANY YEARS, THE FIRM HAS
BEEN A SUBCONTRACTOR TO A
STATE-OWNED STEEL COMPANY IN
SHANGHAI.

Wu says "Steel pipes are used in a dust removal device that protects the environment."

Zhou says "For the state-owned steel company?"

The narrator says ZHOU'S PRACTICE IS TO LOOK
CAREFULLY AT THE INNER WORKINGS
OF A COMPANY AND ASCERTAIN ITS
STRENGTHS; QUALITIES THAT CAN'T
OFTEN BE SEEN BY ANALYZING
DATA.
ZHOU REALIZES THIS COMPANY
POSSESSES A HIGH TECHNICAL
CAPABILITY OF WELDING DIFFERENT
METALS PRECISELY.

Wu shows Zhou a big pipe and says "The top is stainless steel, and the bottom is titanium."

The narrator says HE CONCLUDES THIS TECHNOLOGY
IS ALSO NECESSARY FOR NEW
INDUSTRIES, SUCH AS FOR THE
WELDING OF NEW MATERIALS.
IT'S NOT EASY FOR THESE KINDS
OF SUBCONTRACTORS TO BORROW
MONEY FROM EXISTING FINANCIAL
COMPANIES.
AND FOR STEEL-RELATED
FACTORIES, IT'S EVEN MORE
DIFFICULT.
ZHOU GETS DOWN TO BUSINESS,
TOGETHER WITH ONE OF HIS
EMPLOYEES IN CHARGE OF THE
BAOSHAN DISTRICT.

The employee says "I heard that you have a debt of 6,800 dollars. Have you paid it back."

Wu says "Not yet.
It'll take another 2 or 3 months."

The employee says "So you still have debts."

Zhou says "What's the interest rate?"

Wu says "It's high."

Zhou says "So, about financing..."

Wu says "Right, how much will you lend me?"

Zhou says "Our risk management department has to make an assessment. But with my inspection, I think, up to 14,000 dollars."

Wu says "I want to do this fast, keep the procedure simple."

Zhou says "Our sales point is speed."

Wu says "When banks see we're a steel company, they refuse loans."

Zhou says "Banks have been hurt in the steel industry. I understand how they feel."

Zhou says "OK, shall we try it?"

Wu says "Please help us out somehow."

They shake hands.

The narrator says THE COMPANY NEEDS AROUND 14,000
TO STAY AFLOAT.
THEY DON'T NEED TO PUT UP
COLLATERAL.
ZHOU AND HIS TEAM MAKE AN
OFFERING FOR THE LOAN THROUGH
THE INTERNET.
WILL ANYONE RESPOND?

The employee says "Some money's come in. 23 percent. Oh, we've got more. 6,800 dollars."

The interviewer says "6,800 from one person?"

The employee says "It's because the interest is 9 percent annually. If they have money, they'll lend it. Funding raised."

The interviewer says "How long did it take?"

The employee says "20 minutes."

The narrator says SEVEN PEOPLE INVESTED.
ZHOU AND HIS STAFF DO ANOTHER
RISK CHECK, THEN THEY PREPARE
TO TRANSFER THE MONEY TO THE
IRON WORKS COMPANY'S ACCOUNT.

Zhou says "Financing of China's private-sector companies has special characteristics. The borrowing period is short, the amount is small,
and they often need to borrow money quickly. But since bank inspections take time, they cannot meet the demand for speed. In contrast, our examination only takes 1 or 2 days."

The caption changes to "Dongzhi, Anhui Province."

The narrator says RONGDAO WANG IS PUTTING ITS
RESOURCES INTO ANOTHER INDUSTRY
THEY FEEL HAS POTENTIAL TO
GROW.
IT IS AGRICULTURAL
CORPORATIONS.
THE SECTOR IS INTERTWINED WITH
THE NATION'S 10 BIG GROWTH
INDUSTRIES, BUT FINANCING IS
NOT REACHING IT.
TODAY, ZHOU IS VISITING A
LARGE-SCALE PLANTATION IN ANHUI
PROVINCE THAT HE'S PROVIDING
FINANCING TO.
HE'S COME TO INSPECT THESE
FIELDS WHICH WERE RECENTLY
DAMAGED IN A FLOOD.
(DOG BARKING)

Zhou steps out of a car and says "One of our customers is producing kiwi fruit. Since there was wide-scale flooding recently, I've been worried about damage here. I'm here to see the situation."

Zhou meets the owner.

The owner says "It was rough."

Zhou says "I thought so. It appears to be fine."

The owner says "The water really hit us."

The narrator says WITH FINANCING FROM RONGDAO
WANG, THIS AGRICULTURAL
CORPORATION LAUNCHED
LARGE-SCALE CULTIVATION OF KIWI
FRUIT.
THE FLOODING HAPPENED JUST
BEFORE THE HARVEST.

The owner says "The water soaked the fruit. We see dirt. These trees were soaked. Water came to here."

Zhou says "How much has been ruined?"

The owner says "40 percent."

Zhou says "40 percent?"

The owner says "That's right."

The narrator says ZHOU IS ALSO VISITING AN
AQUACULTURE COMPANY THAT
PRODUCES FRESHWATER FISH.
WITH THE RONGDAO WANG FUND, THE
COMPANY EXPANDED ITS OPERATIONS
AND INCREASED THE VARIETIES OF
FISH IT PRODUCES.
HOWEVER, THE FLOOD RAISED WATER
LEVELS IN THEIR PONDS, AND
ALMOST ALL THE FRY THEY HAD
JUST PURCHASED SWAM AWAY.

The owner says "The damage is about 100,000 dollars. The buildings and facilities were also damaged. Since the fish that escaped were fry, the number was enormous. Maybe around 30 million fry."

Zhou says "Do you need additional financing?"

The owner says "Absolutely. I hope you'll lend us what we need
under the best terms possible. To replenish the fish stock, we'll need between 40,000 and 70,000 dollars."

The narrator says THE COMPANY WILL NEED
ADDITIONAL FINANCING TO
CONTINUE ITS OPERATIONS.
HOWEVER, THE RISK IS VERY HIGH.

(music plays)

The narrator says THE GOVERNMENT EXPECTS RAPIDLY
GROWING NEW INVESTMENT
COMPANIES TO PLAY A MAJOR ROLE
IN CHANNELLING FUNDS TO GROWTH
INDUSTRIES.
HUGE AMOUNTS OF PERSONAL ASSETS
ARE FLOWING INTO THESE
INDUSTRIES, HELPING GIVE BIRTH
TO 12,000 NEW COMPANIES EVERY
DAY.
HOWEVER, THIS INVESTMENT BOOM
IS OVERHEATING AS IT GOES
BEYOND THE GOVERNMENT'S
INTENTIONS AND CAUSES A NUMBER
OF PROBLEMS.
(PEOPLE SHOUTING)

A clip shows an angry people crowding at the entrance of a building with a caption that reads "Bilked investors demanding relief from the government."

The narrator says IN DECEMBER 2015, AUTHORITIES
UNCOVERED WHAT'S BELIEVED TO BE
THE BIGGEST FRAUD CASE IN
CHINA'S HISTORY.
EXECUTIVES OF AN INTERNET
FINANCING COMPANY EMBEZZLED
MORE THAN 6.8 BILLION DOLLARS IN
INVESTORS' FUNDS.
THEY STOLE SAVINGS FROM SOME
900,000 PEOPLE, AND THE TROUBLE
HASN'T ENDED WITH THIS CASE.

A woman thrown to the ground says "What a terrible thing to do!"

(WOMAN CRYING)

An employee at a company says "Good afternoon, House for Online Finance."

The narrator says THIS IS A CONSULTING SERVICE
FOR ONLINE FINANCE PROBLEMS.

A caller says "I was tricked out of my money."

A staff member says "How were you tricked?"

The caller says "I can't contact the company."

The staff member says "Since when?"

A caller says "Since last week."

The narrator says MORE THAN 600 CASES ARE
REPORTED BY TELEPHONE OR EMAIL
EVERY WEEK.

A caption reads "Website closed down. Can't withdraw cash. Embezzlement. Fraud."

The narrator says IN MOST INSTANCES, MONEY THAT
HAD BEEN LOANED OUT IS NOT
RETURNED TO INVESTORS.

A man says "These are internet finance companies with issues. There are various problems. This mark means the company president disappeared. This means the police are investigating."

The narrator says IT'S SAID THAT UP TO NOW, ONE
IN THREE ONLINE FINANCE
COMPANIES HAS CAUSED PROBLEMS
FOR ITS CUSTOMERS.
IN AUGUST 2016, THE CHINESE
GOVERNMENT FINALLY UNVEILED
REGULATIONS FOR INTERNET
FINANCE.
AMONG OTHER THINGS, THE
REGULATIONS IMPOSE LENDING
LIMITS AND STRICTER FINANCING
OVERSIGHT.
GOVERNMENT LEADERS ARE
BEGINNING TO TRY TO CONTAIN
THIS OVEREXTENDED BOOM.

Captions read "1 million yuan (150,000 US dollars) loan limit. Truth in financing."

The narrator says HOWEVER, THE POWERFUL MOMENTUM
UNLEASHED BY THE TORRENT OF
MONEY-SEEKING PROFITABLE
TARGETS FOR INVESTMENT IS NOT
GOING AWAY.
AND AS THIS INDUSTRY REMAINS
HOT, COMPETITION AMONG
INVESTMENT COMPANIES IS
BECOMING MORE INTENSE.
THAT'S FORCED PAN XIAOXI TO
CONTINUE WITH HER PUNISHING
SCHEDULE AS SHE SEEKS NEW
INVESTMENT TARGETS.

The caption changes to "Xuzhou, Jiangsu Province."

Pam says "I'm tired. I stayed up all night preparing documents."

The narrator says IN ORDER TO BEAT THE
COMPETITION, SHE'S TRYING TO
FIND BIGGER AND RISKIER
INVESTMENT PROJECTS.
TODAY SHE'S VISITING A VENTURE
COMPANY THAT'S INVOLVED IN A
BIG PROJECT RELATED TO THE
ENVIRONMENT AND ENERGY; AN AREA
THE CHINESE GOVERNMENT IS
FOCUSING ON.
THIS BIOMASS POWER GENERATION
PROJECT PRODUCES ELECTRICITY BY
BURNING AGRICULTURAL AND OTHER
WASTE.

Pan says "Are you making fuel here?"

The owner says "Yes. We process it here."

The narrator says THE COMPANY'S ORIGINAL
TECHNOLOGY IS USED FOR MAKING
FUEL.

A woman says "The raw materials are wheat stalks, corn stalks, the scraps after the cultivation of mushrooms, etcetera."

The narrator says AGRICULTURAL WASTE IS ONE OF
THE CAUSES OF ENVIRONMENTAL
POLLUTION IN RURAL AREAS.
THE COMPANY IS TURNING THIS
WASTE INTO FUEL.
THEY PUT IT INTO THIS MACHINE
AND USING THEIR ORIGINAL
PRESSURE TECHNOLOGY, THEY
COMPRESS THE WASTE, TURNING IT
INTO FUEL.

Employees drop waste into a container and it transforms it into fuel.

Pan says "This is your original technology?"

The woman says "Yes. He invented it after years of research."

The narrator says THIS ENTREPRENEUR IS A FORMER
UNIVERSITY RESEARCHER.
HE DEVELOPED THIS SPECIAL
PRESSURE TECHNOLOGY.
HE SAYS HE HAS ACHIEVED HALF OF
THE COMBUSTION POWER OF COAL AT
THE SAME WEIGHT.
HOWEVER, THE CONSTRUCTION OF
THIS POWER GENERATION PLANT
PRESENTS MORE RISKS THAN
EXPECTED.

The caption changes to "Construction site for biomass power plant."

The narrator says THE LOCAL GOVERNMENT SOLD THE
LAND TO THE COMPANY AT A CHEAP
PRICE.
BUT THE CONSTRUCTION PLAN WAS
OVERLY OPTIMISTIC AND THE
COMPANY DEPLETED ITS FUNDS
COVERING BASIC BUILDING COSTS.
CONSTRUCTION HAS BEEN SUSPENDED
FOR MORE THAN A YEAR.

The owner says "If you invest in the project, you'll recover your money in no time. Once we start generating electricity, we'll bring in more than 150,000 dollars a day."

The narrator says THE RESUMPTION OF CONSTRUCTION
BRINGS RISKS, TOO.
THESE INCLUDE THE PROBLEM OF
COMPENSATION DURING THE WORK
STOPPAGE, AND THE REVAMPING OF
THE BASIC CONSTRUCTION PLAN.
COMPANY REPRESENTATIVES STRESS
THAT THEY'VE BEEN GETTING
INQUIRIES FROM ABROAD, BUT THE
QUESTION IS WHETHER INVESTORS
CAN ACTUALLY GET A RETURN
COMMENSURATE TO THE RISK.

Pan says "How much stock are you willing to transfer and at what cost?"

The owner says "We'll turn over 70 percent. In return, we want 27 million dollars. We can work out the details later. How about it?"

Pan says "When can we get back the 27 million?"

The owner says "In 4 years."

Pan says "4 years?"

The owner says "Yes, that's right."

Pan says "Since our funds come from personal investors, they'll expect a return in half a year. Of course investing in the environment and energy
supports government priority."

The owner says "We will be a big hit."

Pan says "But we must think about investor returns."

The owner says "It will be impossible to return 27 million dollars in 6 months. Only construction itself will take 9 months. I want to spread this technology from China to the rest of the world."

Pan says "Do you want to make money or pursue a dream?"

The owner says "It's the money."

Pan says "I don't believe people who follow a dream. They don't look at reality."

The narrator says IT'S A BIG INVESTMENT AND IF IT
FAILS, PAN'S COMPANY WILL
SUFFER SERIOUS DAMAGE.
ON TOP OF THAT, THERE ARE NO
PROSPECTS OF A QUICK RETURN;
SOMETHING THEIR CLIENTS EXPECT.
PAN DECIDES TO PASS ON THE
DEAL.

Pan says "We get heavy pressure from clients. I want to increase investment in energy and the environment, but I'll pass this time. Had I been there from the start it would have worked."

The narrator says PAN ALWAYS WORKS TO GET A HIGH
ANNUAL YIELD OF 30 percent FROM HER
COMPANIES' INVESTMENTS.
IT'S A HARD THING TO DO IF SHE
DOESN'T PILE UP A LOT OF SMALL
INVESTMENTS.
PAN FEELS CAUGHT BETWEEN THE
DEMAND FOR PROFIT FROM HER
CLIENTS, AND THE EXPECTATIONS
OF THE GOVERNMENT.
THE PRESSURE TO CONTINUE TO
PRODUCE RESULTS IS RELENTLESS.

Pan shows a picture of her graduation and says "This is when I graduated."

The interviewer says "Which university?"

Pan says "The graduate school of the University of Edinburgh."

The interviewer says "What did you study?"

Pan says "Digital media. That's close to your work. Graduates with top grades had their pictures taken with important people at the university. I was smiling so brightly on that day.

The interviewer says "Does that mean you're gloomy now?"

Pan says "Yes, especially after I came back to China. People involved in investment are all operating in the dark and struggling to produce good results. I don't know if I'm contributing to China's growth, I can only try to help as many entrepreneurs as I can get a chance."

The narrator says IN ORDER TO SURVIVE THE
COMPETITION, PAN HAS WORKED DAY
AND NIGHT TO EXPAND HER
BUSINESS.
ONE CASE THAT CAME UP HELPS TO
REMIND HER OF HOW HARD IT IS TO
FIND DIAMONDS IN THE ROUGH AS
SHE CONTINUES TO MINE THE WORLD
OF START-UP BUSINESSES.

She meets with two men.

She says "I'm really annoyed. I never dreamed that the doctor would do such a thing. I'm really bothered by it."

The narrator says THE SOURCE OF THE PROBLEM IS A
DOCTOR OF CHINESE MEDICINE WHO
WAS INTRODUCED TO HER BY AN
INFLUENTIAL PERSON.
THE DOCTOR NEEDED FINANCING
BECAUSE HE WANTED TO
COMMERCIALIZE HIS ACUPRESSURE
HEALTH METHOD.
PAN LIKED THE IDEA, AND SO SHE
PREPARED OFFICES FOR HIM AND
MADE UP A PROPOSAL FOR HIS
BUSINESS PLAN.
BUT THEN, A PROBLEM AROSE, AND
THEY WERE FORCED TO SUSPEND THE
BUSINESS.

Pan walks in an office building and says "We have 5 rooms in all. The doctor used my proposal irresponsibly to collect money."

The narrator says PAN STOPPED THE PROJECT AFTER
SHE SAYS SHE FOUND OUT THE
DOCTOR USED HER PROPOSAL AS
BAIT TO HOLD PARTIES TO GATHER
MONEY, POSSIBLY ILLEGALLY.
SHE WAS CAUGHT OFF-GUARD
BECAUSE THE CONNECTION CAME
FROM THAT TRUSTED, INFLUENTIAL
INDIVIDUAL.
PAN CALLED THAT PERSON'S
OFFICE, BUT THEY WOULDN'T
ANSWER.
SHE HAD SOMEONE ELSE CALL TO
PROTEST.
(WOMAN SPEAKING OVER PHONE)

The woman on the phone says "Pan went too far ahead without enough preparation. They hadn't decided how they would launch the business.
And hadn't even signed a contract."

The man Pan had make the call says "As far as I know, payment for the proposal hasn't been made to Pan."

The woman says "She had an assistant write it, and it was sketchy and poorly prepared."

Pam looks upset.

The narrator says THE TWO PARTIES CANNOT AGREE ON
ANYTHING.

The woman on the phone says "It won't do any good to continue this endless discussion."

The narrator says PAN BELIEVES THAT PERSONAL
CONNECTIONS WERE THE KEY TO
SUCCESS IN CHINESE SOCIETY.
IT WAS THE FIRST TIME SHE'D
BEEN BETRAYED BY ONE.

Pam says "I may lose friends, but I'll always have them pay upfront before I say a word from now. The impact on my life is that I'll never believe in other people again."

M says MEANWHILE, STAFF AT RONGDAO
WANG HAVE BEEN VERY BUSY
RESPONDING TO A NEW GOVERNMENT
REGULATION RELEASED IN AUGUST
2016.
THEY ARE FACING MORE SCRUTINY
AS THE GOVERNMENT RATCHETS UP
ITS INSPECTIONS OF INTERNET
FINANCE OPERATIONS.
THE TIME AND COST REQUIRED TO
READY THEMSELVES FOR THE
INSPECTIONS HAVE INCREASED
DRAMATICALLY.
THEY'RE BEGINNING TO WORRY
ABOUT THE IMPACT ON THEIR
HALLMARK: THEIR SPEEDY
FINANCING.
TODAY, RONGDAO WANG BEGINS
THE DIFFICULT TASK OF REVIEWING
THE ADDITIONAL FUNDING FOR THE
TWO COMPANIES DAMAGED BY THE
FLOOD.

Zhou says "Above all, we'll support government-led solutions to the problems facing agriculture. First, the aquaculture company. Their fish escaped because of the flooding. I want to consider 41,000 dollars in additional financing."

A staff member says "But what if the same thing happens half year from now? We won't be able to recover the loan."

Zhou says "The credit rating of this company is very high. But it can't get a loan from the local banks. That's why they're depending on us. Also, the kiwi fruit company. I want to give this corporation 14,000 dollars in additional financing."

Another staff member says "What I'm worried about is whether these companies have other stable sources of revenue. Additional financing presents a risk."

Zhou says "I understand. But I've found absolutely no history of bad loans. Their families are stable. Their children attend school. Besides, it seems they have pretty close relations with local government officials."

A third staff member says "Then, I agree to give them additional financing."

The second staff member says "Do they have any other debts?"

Zhou says "We're the only one lending them money. There's no one else."

The narrator says ZHOU DECIDES TO PROVIDE THE
ADDITIONAL FINANCING, PUSHING
ASIDE THEIR CONCERNS ABOUT
RISKS.

Zhou says "Our role is to channel the Chinese people's assets and wealth to areas that can create the most value. That's small, private sector companies. We are linked to the people at the end of the line, to the "cells" of the state economy lifeblood. I feel in them the latent potential of China."

The narrator says WILL THEY BE ABLE TO RAISE THE
MONEY FOR THE ADDITIONAL
FINANCING DESPITE THE RISKS?

The employee says "Reached to 100 percent."

The interviewer says "How long did it take?"

The employee says "5 minutes."

The narrator says BUT AS ALWAYS, THEY RAISE THE
MONEY JUST LIKE THAT.
THEN THERE'S THE IRON WORKS
COMPANY THAT IS ASKING RONGDAO
WANG TO PROVIDE WORKING CAPITAL
FINANCING.
IT'S BEEN SIX DAYS SINCE THE
MONEY FOR THE LOAN WAS
COLLECTED THROUGH THE INTERNET.
(SPEAKING IN FOREIGN LANGUAGE)

The interviewer says "Have you gotten the money yet?"

Wu says "Not yet."

The interviewer says "Why not?"
Wu says "Ask Rongdao Wang. They're so late, too late. We'll go about doing what we can."

The narrator says THE PERSON IN CHARGE OF THE
LOAN FROM RONGDAO WANG ARRIVES.

The person says "I'm sorry for the delay."

Wu says "So, how's it going?"

The person says "How should I say this? In recent months, regulations
on online financing have gotten strict. Our risk management department is really busy now. After the holidays, we'll give you satisfactory results.

Wu says "I understand. I'll wait."

The narrator says SPEEDY FINANCING IS THE
LIFEBLOOD OF RONGDAO WANG.
WILL THEY BE ABLE TO CONTINUE
TO FULFIL THAT ROLE UNDER THE
NEW REGULATION REGIME?
IN THE END, IT TOOK MORE THAN A
MONTH FOR THE COMPANY TO GET
ITS FINANCING.
AFTER GETTING BADLY BURNED BY
ONE INVESTMENT, PAN HAS JUST
RECEIVED A GOOD OFFER.
A BIG-NAME INVESTOR HAS ASKED
HER TO PARTICIPATE IN A LARGE
PROJECT HE'S JUST LAUNCHED.

The interviewer says "What kind of business will you be into from today?"

Pan says "I'll be participating in the operation of an investment fund in the entertainment industry, mainly television, movies. The fund is 1.4 billion dollars."

The narrator says PAN'S NEXT FOCUS OF BUSINESS IS
CHINA'S ENTERTAINMENT INDUSTRY,
WHICH THE GOVERNMENT VALUES AS
A NEW SOFT CULTURE EXPORT.

Pan says "I like working with people who are like wolves. The people in my company are stability-oriented. But the chairman of this new fund is very ambitious, like me. I expect to enjoy working with him. We're aiming for the same thing."

The interviewer says "Does an investor have to be like a wolf?"

Pan says "Yes, absolutely."

The narrator says WHILE BEING AWARE OF GOVERNMENT
POLICIES, PAN IS OFF ON ANOTHER
TRIP TO LOOK FOR A PROMISING
TARGET FOR INVESTMENT.
(HORN HONKING)
CHINA IS NOW A VENTURE CAPITAL
SUPERPOWER, PRODUCING 12,000
START-UPS EVERY DAY.
BUT THE QUESTION IS: HOW MANY
LEADERS OF THE NEXT-GENERATION
INDUSTRIES WILL IT BE ABLE TO
FOSTER?
THE MONEY OF 1.4 BILLION PEOPLE
CONTINUES TO CHANGE HANDS IN
THE COUNTRY'S FINANCE CAPITAL
TO FEED THE GROWTH OF A GREAT
CHINA.

Music plays as the end credits roll.

Produced by NHK.

Copyright NHK.

Watch: Ep. 2 - Feeding Personal Wealth