Get-rich mentality puts poorest at risk
Rapidly developing countries tend to create big wealth gaps, with most people on the wrong side of them. None compare with modern China in creating enormous personal wealth and prosperity. But the vast majority of its people are yet to experience it. Many have-nots see people becoming wealthy overnight, not by working hard and saving up but by risk-taking, luck and using official connections. Many believe that they too cannot become wealthy without luck or help.
This can lead to a get-rich-quick mentality, making people easy prey for unscrupulous businessmen who promote scams designed to raise funds for their own enterprises. Among the most notorious, as we report today, are schemes that illegally raised funds by promising high returns for investment in companies by people who planted trees, mushrooms or raised rabbits or ants for them. They are essentially pyramid schemes that depend on the investments of new recruits to finance payments to existing investors, until the bubble bursts and they go bankrupt.
The latest to go under is Yilishen Tianxi Group in Liaoning province , which made what purported to be an aphrodisiac tonic from ants raised by investors. More than a million people, mostly retrenched workers or farmers, invested their life savings believing they would get their money back through instalments within a year and then see a return of more than 30 per cent. They trusted the company because it made punctual payments and its chairman appeared to have a cosy relationship with the government.
Ironically, it was not the mainland authorities but the US Food and Drug Administration that blew the whistle on one of the company's dietary products called Yilishen. More than three years ago, the FDA warned consumers not to buy it because it contained the active ingredient in Viagra in prescription strength.
China has cracked down on some of these dubious fund-raising activities in its efforts to prevent overheating in the economy. But it needs to step up education of people about schemes that claim to enable them to get rich quickly. They encourage a belief in the fickleness of prosperity that all too often ends in tears.