“Business cults” pose multi-level challenges to authorities, and heartache for families
When Chuan Yuanchao visited a Zhejiang factory in 2011, he was hoping to get hired as a quality controller. Instead, he ended up being kidnapped, beaten, and forced to sell cosmetics.
Chuan had fallen victim to one of China’s swelling number of violent pyramid schemes (chuanxiao, 传销), characterized by their cult-like recruitment tactics and thuggish enforcement methods. They have been linked to numerous deaths—including three college-educated recruits, whose grisly murders sparked a three-month crackdown in 2017—as well as counter-protests by members angered by the government response.
As defined under 2005’s Regulation of Direct Sales and Regulation on Prohibition of Pyramid Selling, chuanxiao are organizations that illegally make revenue from “joining fees” and donations from members, rather than the sale of an actual product. Sometimes translated as “business cults,” chuanxiao use a combination of persuasion and coercion to control recruits, and incentivized them to enlist new members—a practice known as multi-level marketing (MLM). just nine days). Victims may end up losing their savings, the trust of friends and family, and even their health or their lives.
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Inverting the Pyramid is a story from our issue, “Wild Rides.” To read the entire issue, become a subscriber and receive the full magazine. Alternatively, you can purchase the digital version from the App Store.