(Bloomberg) It looked like the future: a wide, elevated Chinese bus that would speed atop tracks straddling the road while multiple lanes of traffic flowed below. And the future looked surprisingly near. In early August, a prototype of the Transit Elevated Bus -- or TEB -- was tested in northern China.
Just as international excitement began to build, however, the TEB story went off the rails. According to China's state media organs, previously big boosters of the project, the TEB was little more than a publicity stunt -- one of the dozens of peer-to-peer lending scams that have duped retail Chinese investors in recent years by promising unreal annual returns.
The bus bust has thus become a symbol of a different -- and far more damaging -- kind of Chinese ingenuity. The TEB's promoters promised investors 12 percent returns on their money, despite the fact that the prototype bus seemed likely to tip over, couldn't clear most urban bridges and wasn't tall enough to accommodate most vehicles underneath it. They could get away with it in part because those kinds of numbers are par for the course in China's P2P lending industry, which averaged returns of 13.3 percent in 2015.
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