The Strategist

Chinese "Bus of the Future" can be a financial scam

08/09/2016 - 16:09

Chinese media are beginning to express doubts about "practicality" and "expediency" of a "Bus of the Future", which was named Batie.

This machine, about five meters height and 22 meters width, moves on two pylons, which are located along the edge of the road, so that smaller cars can sneak under its belly. The world's first such vehicle of its kind attracted a lot of attention after a 300 meters-long road test took place on Tuesday in the city of Qinhuangdao in Hebei Province. The developer, Technology Development Co, signed a cooperation agreement for production of Batie with five Chinese municipalities.

However, as reported by the Beijing News, the local society has already expressed serious doubts about advisability of investment in the project.

The thing is that financial management of the project was transferred to Beijing online platform Huaying Kailai. Through hundreds of branches located across the country, the organization is asking people to invest money in the project. In addition, these investments are allegedly intended for needs of local self-government, or simply going for unsubstantiated "guarantee of the authorities". 

There is another fact that causes even greater doubts. This is the fact that these loans are going at high interest rates (from 10 to 20 depending on the amount), that supposedly will be paid to depositors after the bus will be put into production. Moreover, the platform says that the bus will eventually resemble a large train allegedly reaching a length of 60 meters. Work of the online platform continues around the clock, despite the fact that, for example, many offices in Chinese cities have been closed over the weekend.

It was found that Batie is just one of investments in Huaying Kailai’s portfolio of applications. The platform is actively expanding investments in sectors such as real estate, construction of roads and bridges, as well as in agriculture, says Global Times. Local media got the information that Huaying Kailai was recently accused illegally receiving money from the public. The company attracted deposits worth billions of yuan, yet number of its projects completed since 2014 did not exceed two. Total contribution in related sectors of the economy did not exceed 200 million yuan (about 15 million dollars). 

Some investors are seriously concerned about getting their money back. "My wife and I have invested over one million yuan in Huaying Kailai platform in 2014 under the annual income of 16 percent. Now we want to get the money back after reading negative news about the online platform", - said one investor in Beijing. The investor has admitted that his family has still profited from the company. 

By the way, the platform can go out on the international market. Indian Prime Minister Narendra Modi has asked the Chinese Ministry of Road Transport to get more information about Batie. He would like to explore possibility and expediency of Batie’s location on Indian roads, told Indian newspaper Deccan Chronicle.

Earlier, Xinhua News Agency reported that the prototype of so-called portal bus Batie have been tested on Tuesday in the city of Qinhuangdao in Hebei Province. It is designed to move on two pillars on special rails installed on edges of the road. Batie’s width allows cars to move under it, thus relieving the road from traffic jams. According to Xinhua reports, the vehicle can accommodate up to 300 passengers.