Xi Jinping promises financial stability. He is not delivering it

Fang Hong is not a typical activist. For years she has run a packaging-materials factory in Qinzhou, a mid-tier city in southern China. Recently, though, the 51-year-old lost millions of yuan investing in “low-risk” financial products. The experience was a shock—and pushed her to connect with hundreds of mainly wealthy people, who, like her, are indignant about their losses. Ms Fang has been gathering information and petitioning local regulators. In September she gathered in the lobby of her bank with customers from around the country to demand their money back.

Such incidents are becoming more common among China’s middle class. Over the past five years the state has cracked down on shadow-banking assets, which are not accounted for on lenders’ balance-sheets and include a dizzying array of financial products. As a result, the stock of these assets has fallen by 15% since 2017, but still amounts to an astonishing 56trn yuan ($8trn), or a seventh of all banking-system assets. And now that China’s economy is slowing, investors are discovering that many financial products marketed as low-risk are, in fact, quite high-risk.