Walk away the moment you see “high returns,” “guaranteed returns,” or “sure profits”

Regulatory authorities themselves state that any product offering a return rate above 6% should raise red flags, those above 8% are highly risky, and anything above 10% means you should expect to lose all your principal. Legitimate financial products are no longer allowed to guarantee returns or principal safety. Any losses incurred from participating in illegal fundraising efforts must be borne by the individual investor; there is no one to compensate you if things go wrong.

Zero. Just pause for a moment when you encounter these phrases.

In 2018, the former chairperson of the China Banking and Insurance Regulatory Commission stated at the Lujiazui Forum: “Any product offering a return rate above 6% should raise red flags, those above 8% are highly risky, and anything above 10% means you should expect to lose all your principal.” New regulations for asset management require financial institutions to “not guarantee returns or principal safety,” and also stipulate that “when facing difficulties in fulfilling payment obligations, financial institutions must not provide any form of financial support to honor their commitments.” Hence, legitimate financial products no longer offer any guarantee of principal safety. Any losses from illegal fundraising efforts are “to be borne by the individual investors themselves”; no one will compensate you if you suffer losses (China, 2018, 2021).

The 6%, 8%, and 10% thresholds are estimates set by regulators based on practical experience, not formal legal provisions. These figures were mentioned in the context of cracking down on illegal fundraising efforts, and apply specifically to financial products and investment firms that promise unusually high returns. This information does not constitute any form of investment advice.

郭树清 (2018). 防范化解金融风险 奋力跨越重大关口（第十届陆家嘴论坛讲话，国家金融监督管理总局官网）：「在打击非法集资过程中，努力通过多种方式让人民群众认识到，高收益意味着高风险，收益率超过6%的就要打问号，超过8%的就很危险，10%以上就要准备损失全部本金」. https://www.nfra.gov.cn/cn/view/pages/ItemDetail.html?docId=182418；天津市地方金融管理局转载. https://jrgz.tj.gov.cn/ztlm/ztzl/jrjfwphjr/202006/t20200625_2744709.html；中国人民银行等 (2018). 关于规范金融机构资产管理业务的指导意见（银发〔2018〕106 号，第二条、第六条）. https://www.gov.cn/gongbao/content/2018/content_5323101.htm；国务院 (2021). 防范和处置非法集资条例（国务院令第 737 号，第二十五条）. https://www.gov.cn/gongbao/content/2021/content_5588815.htm