The Shuibei gold market in Shenzhen has never seen such panic. Merchants clutching transfer receipts and WeChat chat records gathered in front of shuttered stores, only to realize that their life savings had vanished along with runaway gold dealers.
On September 13, 2025, Shenzhen’s gold hub was rocked by a massive business crisis. Police confirmed that Yuebaoxin Gold had ceased operations, and nearly 20 other gold material suppliers—including Junhao, Huagui, and Shengkai—were soon revealed to be in “abnormal business conditions,” with company heads missing.
Investigations show that Yuebaoxin alone illegally appropriated 260 kilograms of gold products, involving over 200 million RMB. Strikingly, most of the responsible parties were from Hunan Province, raising suspicions of organized crime. Authorities have launched a deeper probe.
01. The Explosion: 20 Dealers Gone in a Day
Shuibei, known as the “heart of China’s gold and jewelry trade,” manages more than 700 billion RMB annually, with 5–10 tons of gold flowing daily. But on September 13, disaster struck—20 gold material dealers vanished in a single day, setting an unprecedented record.
The shock rippled instantly across the industry. Merchants rushed to the scene in disbelief, and even usually calm investors scrambled for information. The crisis spread like wildfire, turning Shuibei into ground zero of a financial earthquake.
02. The Victims: From Small Shops to Entrepreneurs
Among the hardest hit were two sisters born in 2001. Armed with little more than ambition, they quit their jobs to open a tiny gold shop. Their dreams collapsed overnight when their 20 grams of gold stock (worth 16,000 RMB) disappeared in the scam.
“We’re just small traders, living off thin margins. Who would’ve thought we’d bear risks this big?” they said bitterly. Now, with no filing receipt and a long road of legal struggles ahead, their “startup fairy tale” has turned into a survival nightmare.
03. The Trading Model: Trust Over Contracts
The Shuibei market still operates on a “circle of trust” model. Deals are often sealed with WeChat chats and payment screenshots instead of binding contracts.
Even worse, some merchants used clients’ prepayments as private investment capital, creating shadow “funding pools.” This Ponzi-like setup was always a ticking time bomb—dancing on thin ice until it finally cracked.
04. The Root Cause: Shorting Gold and Losing the Bet
Industry insiders revealed that the crisis was driven by speculative short selling of gold.
When gold stabilized at 780 RMB/gram, dealers borrowed gold and sold it, betting the price would fall to 760 RMB. They expected to buy back later at a profit of 20 RMB per gram.
But reality struck: gold surged to 830 RMB/gram instead. Dealers faced losses of 50 RMB per gram, an unsustainable black hole. Unable to cover the gap, they chose the only “exit”—disappearing overnight.
05. History Repeats: Warnings Were Already There
This isn’t Shuibei’s first crisis.
- April 2024: The “Qianbaiwan Jewelry” scandal involved 400 kilograms of gold, worth 200 million RMB.
- April 2025: Another jewelry dealer lost nearly 100 million RMB from gold speculation.
Despite these red flags, market practices barely changed. The current scandal highlights long-ignored risks.
06. The Way Forward: Regulation and Self-Discipline
Experts stress the urgent need for contract enforcement, credit evaluation, and safe payment systems.
- Clear contracts with liability clauses.
- Bank guarantees for payments.
- Blockchain traceability for transaction transparency.
According to Liang Yonghui, Deputy Secretary-General of the China Nonferrous Metals Association’s Gold and Silver Branch, companies must assess partner credit risks dynamically to avoid systemic meltdowns.
In 2025, international gold prices fluctuated between $2,000–$2,400/oz, while China’s domestic price broke 700 RMB/gram. Some Shuibei bosses bet on a decline, lost big, and vanished—leaving empty shops and devastated investors.
Police have already sealed involved stores, and victims are registering cases at local police stations. Still, restoring Shuibei’s commercial credibility will require long-term, coordinated efforts.
References
- Shenzhen Police Official Announcement, September 2025
- China Nonferrous Metals Industry Association – Gold and Silver Branch Commentary
- Industry Insider Interviews (2024–2025 Shuibei Market Incidents)
