Pushing the envelope – Inside China’s vast shadow banking sector

Wu Ying’s rise to riches was like a Horatio Alger story on steroids. A native of Zhejiang province, Wu dropped out of college to work in a beauty salon, then later opened her own salon down the street. By 2006, at the age of 25, Wu had built a conglomerate of hotels and other businesses and had accumulated assets of US$569.4 million, making her the nation’s sixth-richest woman, according to the Hurun Report.

But then the success story went wrong. The police arrested her in 2007, confiscating more than 100 luxury apartments and dozens of cars and businesses. Her alleged crime was financial fraud: Wu had raised US$112 million from 11 people by promising outsized returns. She was sentenced to death in 2009, and China’s supreme court is now preparing to review her case.

Wu’s harsh sentence triggered an uproar. For many, it hammered home the realisation that China cannot…