Recently, a rare “collective anti-counterfeiting” action has been stirred up in the financial sector in Shenzhen. Nearly 20 large banks, including state-owned major banks, have issued statements pointing fingers at the same loan intermediary agency – “Xinxinhuilin Shenzhen Service Consulting Co., Ltd.” and its related companies, expressly denying any cooperation with them. They have warned consumers to be wary of false advertising tactics to prevent falling prey to scams. This action not only reveals a glimpse of the iceberg of financial fraud but also implies the imminent arrival of deep-rooted risks in the Chinese real estate market and a financial cleanup storm.
Recently, about 15 banks including Bank of China, Agricultural Bank of China, Postal Savings Bank, China CITIC Bank, China Merchants Bank, and Ping An Bank have collectively clarified in statements that they have no cooperative relationship with the illegal loan intermediary Xinxinhuilin (Shenzhen) Service Consulting Co., Ltd. and its related companies (“Xinxinhuilin”). The implicated organization has been displaying advertising claiming lower interest rates and partnerships with multiple banks in their related outlets and nearby residential areas, disrupting financial order.
This company, only established for eight months, has rapidly opened 10 offline stores in Shenzhen and holds shares in 9 related enterprises. They aggressively promote ads claiming partnerships with ICBC, Bank of China, Ping An Bank, etc., displaying them in residential elevators, attracting a large number of consumers for consultations. However, their so-called “low-interest loans” turn out to be “business loans” requiring business qualifications, with an additional service fee of 0.2% to 0.8%, effectively raising the borrowing cost for consumers, harming the legitimate rights of financial consumers.
According to reports from “China Business News,” a senior industry insider revealed that placing ads in residential elevators and falsely endorsing bank partnerships for marketing is a common customer acquisition method in the loan assistance industry. These institutions often deliberately use bank logos and other elements in promotional materials to create an association with banks in consumers’ minds. The insider specifically pointed out that compared to industry norms, Xinxinhuilin’s marketing tactics appear more aggressive and bold.
Xinxinhuilin is currently still in operation. A staff member from a joint-stock bank branch stated that they have completely severed cooperation with loan intermediaries, and the bank’s internal affairs are under strict scrutiny to prevent inappropriate dealings with loan assistance agencies, guarding against internal and external collusion risks.
It is reported that when posing as a borrower and calling Xinxinhuilin’s customer service, they mentioned that their advertised “annual 2.5%” low-interest loan actually requires business qualifications for a secured business loan and also charges a service fee of 0.2% to 0.8% of the loan amount. When asked about the differences from directly transacting with a bank, the customer service staff vaguely stated, “We have a better understanding of bank products,” and insisted on visiting offline stores for detailed information.
According to media reports, when Xinxinhuilin announced its opening at the beginning of this year, the company mentioned collaborating with several banks such as Industrial and Commercial Bank of China, Bank of China, Agricultural Bank of China, Ping An Bank, China Construction Bank, China Merchants Bank, Minsheng Bank, and Beijing Bank to provide interest rate reduction and loan amount increase services to community residents. This contradicts the recent bank statements denying cooperation.
Facing the overwhelming scrutiny from banks, Xinxinhuilin announced on July 16 that they have made comprehensive rectifications due to the improper use of public resources and posting bank labels, claiming they have no cooperation with any financial institutions. They downplayed their false advertising as a “minor episode.”
Chinese media reports mention that the second type of emerging chaos in the loan assistance market is the operation of “high appraisal, high loan.” With ongoing adjustments in the real estate market and declining mortgage interest rates, some loan assistance agencies are artificially inflating property appraisals to help clients obtain excessive bank loans.
Investigations have found that this type of operation has formed a complete industry chain. “We can appraise a property valued at 3 million yuan for 4.5 million yuan,” revealed a nameless intermediary, “calculated based on a 15% down payment ratio, the client only needs to pay 670,000 yuan down payment to access a bank loan of 3.83 million yuan.” Through this method, buyers can not only cover the full property price but also extract an additional 830,000 yuan, achieving “zero down payment” for property purchase while obtaining excess loans.
Why would nearly 20 banks collectively speak out and “draw a clear line” with Xinxinhuilin? There are more complex and urgent reasons behind this.
Analysts like the blogger “Lying Flat Uncle,” with 108,000 followers, believe that due to Xinxinhuilin’s blatant false advertising, banks face significant reputation risks and potential legal liabilities. If consumers are deceived due to believing their promotions, banks could be implicated.
He stated that while they publicly disassociate themselves, in private they collude and engage in illicit operations. Loan assistance intermediaries thrive by exploiting consumer information asymmetry and colluding with bank employees to seek illegal gains. These actions often lead to a large number of violations, especially when business loans illegally enter the real estate market for speculative purposes. The urgent disassociation by banks may indicate high-level scrutiny of internal violations.
“Lying Flat Uncle” expressed that authorities must consider the risk of a downturn in the property market, which is a crucial factor. With Shenzhen’s property market sluggish, there is pressure for accelerated price declines. From 2020 to 2021, a substantial amount of business loans illegally flowed into the real estate market through loan assistance intermediaries, serving as a funding source for speculators. Now that these loans are nearing maturity (five years), as property values plummet with falling prices, banks face substantial bad loan risks, requiring borrowers to supplement funds or repay portions of the principal.
Public information reveals a significant increase in second-hand property listings in Shenzhen in the first half of 2025 – with approximately 65,000 listings in January and an ascent to 75,000 listings in July after six months of market adjustments. The surge in supply further intensifies downward price pressure.
According to reports from Dongdong Real Estate Headlines, in the first half of 2025, price declines in some areas of Shenzhen have exceeded 10%, especially in certain non-core regions.
On a macro level, nationwide real estate development investment continues to decline, with significant decreases in sales area and value of commercial properties, leading banks to become highly sensitive to risks.
At this critical juncture, banks need to proactively assess and manage risks to prevent systemic financial risks arising from property devaluation and a concentration of illicit loans triggering defaults. Agencies like Xinxinhuilin, openly promoting “high-frequency, high-loan” practices, are undoubtedly playing with fire, requiring immediate disassociation by banks to prevent self-inflicted damage.
“Lying Flat Uncle” likened this to major train stations and railway systems delineating boundaries with ticket scalpers and speculators – they outwardly distance themselves, yet behind the scenes, they collaborate to exploit unsuspecting individuals. Just like when people go to banks for transactions but face various excuses or unsatisfactory services at the counter, while loan intermediaries can smoothly arrange everything for a fee. Once scrutiny tightens, these covert relationships must be severed.
He emphasized that it is unprecedented for major state-owned banks and joint-stock banks to claim no association with Xinxinhuilin and engaging in “collective anti-counterfeit” efforts, hinting at an impending financial “storm.” “When rain is about to fall, a storm is imminent, and there is a possibility of accelerated property price declines.”