Elderly Care Collapse: Thousands Defrauded in Zhejiang Pension Scheme

Government Support Masks Widespread Financial Ruin for Seniors

Thousands of elderly individuals and their families face financial devastation after a major senior living project in Zhejiang Province, Shunchen Senior Apartment, collapsed, leaving over 4,000 creditors in its wake. Many victims are residents of the very apartments they invested in, now finding their life savings vanished.

“Borrowing” Becomes Ruin for 98% of Residents

An astonishing 98% of residents at Shunchen Senior Apartment, along with 100% of its employees, had “borrowed” funds to the Shunchen Group. This arrangement, which had been in place for over a decade, shattered on April 17th. A recent official notice from July 8th confirmed over 4,000 creditors, though the total debt amount remains undisclosed. Private sources suggest one creditor alone is owed more than 10 million yuan.

Shunchen Group, led by Xu Xiefeng and Xiong Lanqing, operated three nursing home projects. Xiong Lanqing‘s father, Xiong Borong, a former township deputy mayor, had prior experience with private lending before entering the elder care sector. This background in private finance appears to have shaped the group’s operational model, which heavily relied on borrowed capital.

Initially, investors received promised monthly interest payments. However, a growing inability to meet these obligations became apparent. Online videos depicted distressed elderly individuals demanding their investments back outside the Xiyanghong Senior Apartment, a Shunchen subsidiary, on April 21st. Rumors of Xu Xiefeng and Xiong Lanqing absconding proved untrue.

By April 25th, Shunchen Senior Apartment issued a statement announcing it had sought government guidance and that its facilities were operating normally. The company also stated its intention to apply for pre-reorganization proceedings with the Yuyao Municipal People’s Court, urging creditors to be patient. However, a consultation number provided by the company was disconnected by July 25th.

The Shunchen Senior Apartment collapse is not an isolated incident. Shanghai Shanyuhai Investment Group Co., Ltd. (Shanyuhai Group), a healthcare and tourism enterprise targeting affluent seniors, also reportedly defaulted in April. Online speculation places the Shanyuhai Group’s implicated amount at a staggering 4 billion yuan.

Government Endorsement Masks Deceptive Practices

Shunchen Senior Apartment was once lauded as Yuyao’s largest elder care project and was even included in the Ningbo Municipal Government’s “12th Five-Year Plan.” The facility prominently displayed signage identifying it as a “Shunchen Group Party and Mass Service Center.”

From its inception, the project reportedly engaged in illegal fundraising. The division and sale of nursing apartment property rights, without issuing deeds and instead using “nurturing service agreements,” violated regulations. Experts point to governmental negligence in allowing these practices.

One elderly victim recalled seeing numerous photos of government leaders visiting the apartment on bulletin boards in 2019, reinforcing a sense of official endorsement. This oversight allowed what many believed to be a benchmark enterprise, supervised by the Civil Affairs Bureau, to defraud its residents.

Victims discovered that properties acquired through “registered rent” agreements were already occupied by their legal owners. These “reserve rental agreements” effectively meant individuals paid for houses that were not theirs, facing a double loss.

The “programmed rental” scheme involved seniors selecting a unit, paying a substantial “deposit” (essentially the property’s purchase price), and then having Shunchen rent it out on their behalf. The company promised to pay the seniors monthly rent and cover property management fees. Upon expiry of the annual agreement, if not renewed, the deposit was to be fully refunded. This arrangement promised essentially free accommodation or a rental income, but ultimately resulted in total loss.

On July 3rd, Yuyao Municipal Government representatives informed creditors that the Yuyao Municipal Public Security Bureau had launched an investigation. Three primary suspects have been arrested, and authorities are actively working to recover misappropriated funds.

“There are many bad businessmen in China at present, and the government has to bear great responsibility.”

—Wang He, China Issues Expert

“Delicate” Fraud Tactics Target the Educated

Xu Xiefeng, Xiong Lanqing, and Xiong Borong all resided at Shunchen Senior Apartment, reportedly maintaining close, albeit distant, neighborly relations with residents. Xiong Lanqing managed the company’s finances and cultivated personal relationships, addressing residents as “uncle” and “aunt.” She frequently solicited loans directly, even accompanying seniors to banks to withdraw cash, often advising them to conceal these transactions from their children.

In 2019, Shunchen Group also invested in a large-scale elder care complex in Wenling City, Taizhou, Zhejiang Province, known as Qinxiyuan International Health City. This project, covering 86 mu and planned for at least 2,500 beds, was highlighted by official media as a Wenling City Mayor’s Project, with support from local government officials, including the then director of the Taizhou City Civil Affairs Bureau.

According to information from the Beijing News, the Wenling project’s financial failure, due to the COVID-19 pandemic and a weak real estate market, led to significant losses and the overall collapse of Shunchen Group’s capital chain.

By early 2024, principal recovery became increasingly difficult for creditors. Despite this, Shunchen Group announced plans for an IPO in late 2024, intending to sell its original shares. This move prompted all Shunchen Senior Apartment employees to invest, with the smallest individual investment reported at 100,000 yuan.

In late March, Shunchen Group hosted a three-day opera festival for residents, offering free entertainment. Less than a month later, the group’s financial collapse became public.

“Many of the people living in Shunchen Senior Apartment are teachers and retired cadres, all of whom have educational backgrounds and social experience, which is different from rural farmers being deceived. It is indirectly reflected that the current fraud form in China has been ‘detailed’, making it difficult for people who have been educated and seen on the market to be guarded against.”

—Wang He, China Issues Expert

Similar to Shunchen, Shanyuhai Group targeted “high net worth middle-aged and elderly people.” Shanyuhai Group’s founder, Xiong Xiong, gained a significant online following, branding himself as a community figure. The group actively engaged with seniors, offering free health checks, organizing cultural activities, and providing personal gifts on birthdays, building a strong rapport before its eventual downfall.