Is it a crime in China to submit falsified financial statements to get a bank loan?

It can be. Falsified statements are "deceptive means" for obtaining loans by deception (Criminal Law Art. 175-1) and "false certification documents" for loan fraud (Art. 193). Which offence, if any, depends on whether there was intent to illegally possess the money and whether the bank suffered a major loss.

What is the difference between loan fraud and obtaining loans by deception in China?

Loan fraud requires intent to illegally possess the loan, can only be committed by individuals and carries up to life imprisonment. Obtaining loans by deception does not require that intent, can be committed by companies, requires a major loss to the bank (filing threshold RMB 500,000 direct loss) and carries up to seven years.

If I repaid the loan on time, can I still be prosecuted for obtaining a loan by deception?

Generally not since Criminal Law Amendment XI (effective 1 March 2021) removed "other serious circumstances" from the basic offence: the bank must have suffered a major loss. False documents can still lead to contract termination, early recall of the loan, credit-record damage and regulatory penalties.

How do Chinese courts decide whether there was intent to illegally possess a loan?

By looking at the whole case: repayment ability and debt structure when applying, whether there was real business activity or a real project, how the loan was used, repayment, and whether funds were withdrawn, transferred or assets hidden or the borrower absconded — not simply the fact that the loan was not repaid.

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Obtaining Loans by Deception vs Loan Fraud in China — Criminal Risk of "Dressing Up" Financial Statements for a Business Loan, with Guangdong Cases

Statutes checked word for word · Guangdong judgment database cases · People's Court Case Database, typical and guiding cases · full judgments

Sources: published court judgments, the People's Court Case Database and public statute databases | search date 2026-09-02 | for research reference only; not a formal legal opinion

English edition of Wang Xin’s Chinese research report 骗取贷款罪 vs 贷款诈骗罪 · 刑事风险分析与广东类案检索. Case numbers are kept in their original Chinese form so they can be searched and verified; the full-text judgments they link to are in Chinese.

The 30-second answer

Loan fraud requires proof of intent to illegally possess the loan; falsified statements or untrue application materials alone do not establish it.
Obtaining loans by deception focuses on obtaining a loan by deceptive means and causing a major loss (or, before 2021, other serious circumstances), and closely depends on whether there was real business, repayment capacity and security.
Whether turning a loss into a profit on the statements is a crime depends on whether the false information was decisive for the credit decision, how the loan was used, where the money went, performance and the resulting loss.
In comparable cases the charge and outcome depend heavily on the combination of evidence; a conclusion cannot rest on one false document.

Scope and exceptions as set out in the text · page structure updated 2026-09-19 · statute check dates in the text

1. Conclusions at a glance (start here)

Core conclusion: "dressing up" a company's statements to show a profit and using them to apply for a business loan is, in substance, obtaining a loan from a financial institution by providing false certification documents / false credit information. Whether it is a crime, and which crime, depends on two key variables:

Was there "intent to illegally possess"? (This decides between "loan fraud" and "obtaining loans by deception".)
Did it "cause the bank a major loss"? (Since Criminal Law Amendment XI in 2021, the basic offence of obtaining loans by deception requires a "major loss".)

Situation	Classification (inference · practical analysis)	Statutory penalty
Intent to illegally possess + relatively large amount	Loan fraud (Criminal Law Art. 193; individuals only)	Up to 5 years … up to life imprisonment
No intent to illegally possess + major loss to the bank	Obtaining loans by deception (Art. 175-1; companies and individuals)	Up to 3 years … up to 7 years
No intent to illegally possess + repaid on time, no loss to the bank	Since the 2021 amendment, generally not obtaining loans by deception (possibly only civil fraud / breach of contract, or a regulatory penalty)	—
An accountant / auditor issues a false audit report to help	Providing false certification documents (Art. 229), etc.	—

⚠️ This "situation matrix" is the report's inference and practical analysis, not statutory text. Any classification must be based on the whole case — use of the funds, repayment ability, whether funds were withdrawn or transferred, whether the borrower absconded — and should not be applied mechanically.

2. Statutory text (checked word for word against public statute databases · in force)

2.1 Obtaining loans by deception — Criminal Law Article 175-1

[Statutory text · Criminal Law of the PRC (2023 amendment), Article 175-1 · in force]

[Crime of obtaining loans, bill acceptance or financial instruments by deception] Whoever obtains loans, bill acceptance, letters of credit, letters of guarantee, etc. from a bank or other financial institution by deceptive means, causing a major loss to the bank or other financial institution, shall be sentenced to up to three years' imprisonment or criminal detention, with or solely a fine; where an especially major loss is caused or there are other especially serious circumstances, to three to seven years' imprisonment and a fine.

Where a unit commits the crime in the preceding paragraph, it shall be fined, and the directly responsible persons in charge and other directly responsible persons shall be punished under the preceding paragraph.

Legislative history (key)

Criminal Law Amendment VI (2006) created the offence; the first tier originally read "causing a major loss to the bank or other financial institution or other serious circumstances".
Criminal Law Amendment XI of 26 December 2020 (effective 1 March 2021) changed the first tier to "causing a major loss" only, deleting "or other serious circumstances".
Related: Article 27 of the SPP and MPS Provisions on Case Filing Standards for Criminal Cases under Police Jurisdiction (II) — obtaining a loan from a financial institution by deceptive means causing a direct economic loss of RMB 500,000 or more shall be filed for prosecution.

[Inference · practical significance]

Since Amendment XI deleted "other serious circumstances", if the loan is repaid on time and the bank suffers no loss, the borrower will in principle no longer be convicted merely for "a large amount" or "bad methods", even if false statements were provided at application; the question returns to the result element of "a major loss to the bank". This is crucial for the "dressed-up statements but normal repayment" scenario.

2.2 Loan fraud — Criminal Law Article 193

[Statutory text · Criminal Law of the PRC (2023 amendment), Article 193 · in force]

[Crime of loan fraud] Whoever, with the purpose of illegal possession, defrauds a bank or other financial institution of loans in any of the following ways, in a relatively large amount, shall be sentenced to up to five years' imprisonment or criminal detention and a fine of RMB 20,000 to 200,000; where the amount is huge or there are other serious circumstances, to five to ten years' imprisonment and a fine of RMB 50,000 to 500,000; where the amount is especially huge or there are other especially serious circumstances, to ten years' or more imprisonment or life imprisonment and a fine of RMB 50,000 to 500,000 or confiscation of property:

(1) fabricating false reasons such as introducing funds or projects;
(2) using false economic contracts;
(3) using false certification documents;
(4) using false property certificates as security, or giving repeated security beyond the value of the collateral;
(5) defrauding loans by other means.

[Inference · practice note]

"Turning loss-making statements into profitable ones" falls squarely within item (3), "using false certification documents" — the same deceptive means can serve both offences, and which one applies depends on whether there was "the purpose of illegal possession". Loan fraud has no unit-offence provision; where the conduct was in the company's name and individual illegal possession cannot be found, courts often convict of obtaining loans by deception (as a unit offence) or contract fraud instead.

3. The core differences between the two offences

Item	Obtaining loans by deception (Art. 175-1)	Loan fraud (Art. 193)
Mental element	Does not require "purpose of illegal possession" — only deceptive means + a major loss	Requires "purpose of illegal possession"
Who can commit it	Units and individuals (paragraph 2 provides for unit offences)	Individuals only (no unit-offence provision)
Threshold	Centred on "causing a major loss" (filing standard: direct loss of RMB 500,000+)	Centred on a "relatively large amount" defrauded
Maximum penalty	7 years' imprisonment	Life imprisonment
Article	Criminal Law Art. 175-1 (added 2006)	Criminal Law Art. 193 (1997)

How "purpose of illegal possession" is established (People's Court Case Database holdings, citable)

Qiu Mouping, Tan Mou and others, obtaining loans by deception · (2023) 桂01刑终266号 [database case]

Holding: The key to distinguishing loan fraud from obtaining loans by deception is whether the actor had the purpose of illegal possession. Following the principle that subjective and objective must match, this should be judged comprehensively from the actor's repayment ability and asset-debt structure when applying, whether there was actual production or business or an actual investment project, the use of the loan, repayment, and whether funds were withdrawn or transferred or assets hidden, avoiding inferring the purpose merely from the result that the loan was not ultimately repaid. (Loan fraud at first instance; changed to obtaining loans by deception on appeal.)

A Wuhan company and Wu Moumou, obtaining loans by deception · (2014) 鄂刑一抗字第00005号 [database case]

Holding: The purpose of illegal possession cannot be found one-sidedly from the objective act of "using false materials" plus the objective result of "not repaying"; consider three aspects: (1) assets and liabilities and repayment ability before borrowing; (2) whether the actual use of the loan could preserve or increase value; (3) whether there was hiding of assets, malicious transfer of assets or flight to avoid repayment. (Concealing continuing losses and providing false financial reports still led only to obtaining loans by deception, not a fraud offence.)

Bian Moushan, obtaining loans by deceptionno judgment text in the database · (2021) 兵1002刑初10号 [database case]

Holding: The two offences clearly differ — obtaining loans by deception does not require the purpose of illegal possession. Where both lender and borrower knew the renewed loan was to fill earlier gaps and was a sham loan to resolve a non-performing loan, and the funds remained under the financial institution's actual control so the borrower could not possess them, the purpose of illegal possession cannot be found.

4. Analysis: "business loan + dressed-up statements (loss turned into profit)"

[Inference · practical analysis] Everything below is analysis, not statutory text

4.1 What "dressing up the statements" is in criminal law

"Turning a loss into a profit" = giving the bank a false income statement / balance sheet / financial statements, i.e. fabricating creditworthiness and profitability. It falls under both:

item (3) of Art. 193, "using false certification documents" (a means of loan fraud);
Art. 175-1, "obtaining loans from a financial institution by deceptive means" (the means of obtaining loans by deception).

In other words, the means is "deception" and is common to both; the watershed is the mental element and the loss.

4.2 Three levels of analysis

Was there a purpose of illegal possession? — If the loan was used for the declared business purpose (e.g. letting an office building, normal working capital), principal and interest were paid normally, funds were not withdrawn or transferred and the borrower did not abscond → leans to no purpose of illegal possession, excluding loan fraud.
Did the bank suffer a major loss? — If repaid on time with no loss (business loans often require real, adequate collateral such as property), since 2021 it is generally not obtaining loans by deception; if it cannot be repaid and the bank suffers an actual loss, it may be obtaining loans by deception (company or individual, up to 7 years).
Any related offences? — issuing false invoices to support the false statements (Art. 205-1), an accountant issuing a false audit report (providing false certification documents, Art. 229), destroying accounting vouchers / books to cover the tracks (concealing or intentionally destroying accounting vouchers, books or financial reports, Art. 162-1), bank staff colluding in the lending (illegally granting loans, Art. 186 / bribery by non-state functionaries, Art. 163).

4.3 Key risk warning

"I only tidied up the statements, and I always intended to repay" — this is the most dangerous illusion. Prosecutors and courts will not just ask "was it repaid?"; they will trace back whether the declared use was real, whether the reported profit was fabricated, whether the collateral valuation was inflated and whether the money was moved away. Once business-loan funds are diverted, the statements found fabricated and a loss results, the criminal risk is triggered; even if repaid, providing false materials can still mean an invalid contract, early recall, a credit-record mark and regulatory penalties.

5. Comparable Guangdong cases (public judgment database)

Search criteria: province = Guangdong · criminal cases · judgments · keywords "obtaining loans by deception" / "loan fraud". 311 hits for the former and 202 for the latter; representative judgments by relevance are listed below (with the court's reasoning and outcome).

5.1 Guangdong · obtaining loans by deception (representative judgments)

Case number / court	Outcome (key orders)
(2024) 粤1521刑初64号 Haifeng County court, Shanwei · first instance	Ye Mouyan and others obtained rural credit cooperative loans by deception, leaving over RMB 4.27 million principal unpaid, a major loss; accessory + voluntary surrender + guilty plea: 1 year, fine RMB 5,000.
(2024) 粤1521刑初261号 Haifeng County court, Shanwei · first instance	Liu Mouquan and others, an especially major loss; accessory + confession + guilty plea: 1 year 6 months, fine RMB 20,000, jointly liable to repay over RMB 5.45 million principal.
(2024) 粤1523刑初59号 Luhe County court, Shanwei · first instance	Li Mouxuan and Huang Moucheng caused a major loss; accessory + confession / surrender + guilty plea: 1 year and 9 months respectively (each with a fine).
(2022) 粤1502刑初285号 Chengqu District court, Shanwei · first instance	Lin Mouhe and others caused a major loss; accessory + surrender + guilty plea: 1 year suspended for 2, fine RMB 10,000.
(2023) 粤0117刑初113号 Conghua District court, Guangzhou · first instance	Jiang Mouming and Jiang Mouzhao caused an especially major loss (+ bribery + false invoices); Jiang Mouming 3 years 6 months (7 years 1 month in total); bank staff separately convicted of illegally granting loans and bribery by non-state functionaries.
(2021) 粤0281刑初53号 Lechang court, Shaoguan · first instance	Lai Shuihua used others' identities to obtain over RMB 2.25 million in three-household joint-guarantee / consumer loans, a major loss; principal offender: 2 years 2 months, fine RMB 220,000.
(2021) 粤0105刑初37号 Haizhu District court, Guangzhou · first instance	Huang Moubin and Li Mouxi obtained loans by deception; guilty pleas: 1 year and 8 months respectively.
(2023) 粤1481刑初197号 Xingning court, Meizhou · first instance	Chen Minghua fabricated the purpose and used false certificates, then absconded (purpose of illegal possession) → loan fraud; surrender + guilty plea: 2 years 7 months, fine RMB 30,000.
(2021) 粤1521刑初78号 Haifeng County court, Shanwei · first instance	Zhong Niang-he and others obtained RMB 7.6 million, leaving RMB 6.9 million principal + RMB 3.35 million interest unpaid, serious circumstances; surrender + guilty plea: 1 year 7 months, fine RMB 40,000.
(2021) 粤1521刑初23号 Haifeng County court, Shanwei · first instance	Wu Xiaoqiong and others obtained RMB 20 million, serious circumstances; accessory + guilty plea: 1 year 1 month suspended for 2, fine RMB 10,000.
(2020) 粤1323刑初855号 Huidong County court, Huizhou · first instance	Li Guoliang created false housing-fund information, causing a major loss; admission + return of proceeds: 1 year, fine RMB 15,000, jointly repay over RMB 1.76 million.
(2020) 粤5224刑初353号 Huilai County court, Jieyang · first instance	Huang Hanchun used false application documents to obtain RMB 39 million and changed its use without authority, especially serious circumstances; surrender + active repayment + forgiveness + guilty plea: 3 years suspended for 4, fine RMB 200,000.
(2020) 粤1971刑初3438号 Dongguan No. 1 court · first instance	Ye Dan and others obtained bank loans for others by deception; confession + guilty plea: 10 months, fine RMB 50,000.
(2020) 粤1521刑初375号 Haifeng County court, Shanwei · first instance	Liu Bizhen, obtaining loans by deception: 1 year 7 months, fine RMB 30,000, ordered to return over RMB 4.27 million principal.
(2020) 粤1521刑初319号 Haifeng County court, Shanwei · first instance	Chen Guocheng, obtaining loans by deception + false advertising, serious circumstances; combined 3 years 3 months, fine RMB 60,000, ordered to return over RMB 8.07 million.
(2020) 粤1521刑初310号 Haifeng County court, Shanwei · first instance	Dai Guohua obtained RMB 30.8 million, leaving RMB 25.1 million principal + RMB 8.51 million interest unpaid, especially serious circumstances; surrender + guilty plea: 4 years 6 months, fine RMB 100,000.
(2020) 粤0305刑初571号 Nanshan District court, Shenzhen · first instance	Wang Jian fabricated loan purposes, causing an especially major loss; principal + surrender + guilty plea: 3 years, fine RMB 200,000.
(2020) 粤0606刑初695号 Shunde District court, Foshan · first instance	Zeng Lifeng fabricated facts, causing a major loss: 1 year, fine RMB 20,000.
(2020) 粤1523刑初52号 Luhe County court, Shanwei · first instance	"Other serious circumstances" (the pre-2021 form of the offence); confession + guilty plea: 2 years 3 months, fine RMB 100,000.

5.2 Guangdong · loan fraud (representative judgments)

Case number / court	Outcome (key orders)
(2026) 粤19刑终594号 Dongguan Intermediate court · appeal	Chen Mou and others defrauded loans in a relatively large amount; the appeal court corrected the "accessory" finding (equal roles), kept the sentence, and ordered joint restitution of RMB 186,763.30.
(2024) 粤刑终646号 Guangdong High court · appeal	Lin Mouhui and others defrauded a financial institution of an especially huge amount; mitigated as accessory: 5 years, fine RMB 50,000.
(2024) 粤1971刑初1110号 Dongguan No. 1 court · first instance	Ye Mouxuan and six others used false certificates to defraud a finance company; Ye Mouxuan (huge amount) 5 years 6 months, the other six 1–2 years.
(2024) 粤1971刑初2969号 Dongguan No. 1 court · first instance	Zhou Mouwu and five others used false certificates; Zhou Mouwu (huge amount) 5 years, the accessories 10 months to 2 years.
(2024) 粤1971刑初4811号 Dongguan No. 1 court · first instance	Ma Mouyan and Liu Moufen used false certificates, relatively large amount; accessories: 1 year 2 months and 11 months.
(2023) 粤0204刑初166号 Zhenjiang District court, Shaoguan · first instance	Li Mouwu and others defrauded a bank, relatively large amount (Art. 193 item 3); surrender + partial return: 1 year 4 months, fine RMB 20,000.
(2024) 粤1623刑初178号 Lianping County court, Heyuan · first instance	Liu Mouyi, relatively large amount; accessory + confession + return: 1 year 6 months suspended for 2, fine RMB 20,000.
(2025) 粤0705刑初885号 Xinhui District court, Jiangmen · first instance	Li Mou used a false contract to defraud a bank, relatively large amount; confession + admission: 1 year 10 months, fine RMB 30,000.
(2026) 粤1971刑初1014号 Dongguan No. 1 court · first instance	Wang Mou and others, relatively large amount (court corrected the "huge amount" charge); accessory: 1 year 6 months, fine RMB 20,000.
(2026) 粤1971刑初119号 Dongguan No. 1 court · first instance	Xie Mou fabricated reasons with others, relatively large amount (corrected from "huge"); accessory + confession: 10 months, fine RMB 20,000, restitution of over RMB 210,000.

6. The Guangdong cases most directly on "loss turned into profit / false financial statements" (key)

All five cases below centre on "false financial statements / audit reports + fabricated profits / losses turned into profits", closely matching the scenario.

★ Xie Heng, obtaining loans by deception · (2017) 粤12刑终191号 (Zhaoqing Intermediate People's Court, Guangdong · appeal · final)

— The Guangdong judgment closest to "turning a loss into a profit": "concealing the company's operating losses and fabricating profits".

Core facts: Xie Heng, legal representative of Huitong Company, applied to a rural commercial bank / credit cooperative for RMB 35 million for "renovation", and: (1) fabricated profits — the loan application stated total profit of RMB 22.8289 million at the end of 2011, while the company's accountant testified that "since it was set up in 2007 it has lost money every year, never made a profit, and the statements all showed losses"; (2) provided false financial statements (inflated revenue, assets and profits); (3) inflated the collateral valuation (valued at RMB 59.17 million, re-appraised at only RMB 23.25 million); (4) forged renovation contracts and completion certificates to draw down funds; (5) most of the loan was transferred to affiliated companies controlled by Xie Heng and not used for the declared purpose.

Classification: the court found a unit offence: Huitong Company committed obtaining loans by deception (serious circumstances), with Xie Heng liable as the directly responsible person in charge; because it was a unit offence, restitution was the company's liability, and the order for Xie personally to make restitution was set aside.

Outcome: the first-instance conviction and sentence of Xie Heng for obtaining loans by deception were upheld (combined with a prior sentence being served); the order for Xie personally to make restitution was set aside. Final judgment.

Zheng Moumou, obtaining loans by deception and issuing false invoices · (2016) 粤0811刑初141号 (Mazhang District court, Zhanjiang · first instance)

— Using "an audit report with false data" + false invoices to obtain loans.

Core facts: Zheng Moumou used an audit report with false data and sales contracts to obtain bank loans, leaving RMB 16.6492 million overdue; he also issued over RMB 150 million in false invoices. The court found the false invoices and the loans served the same goal (obtaining the loans) and were connected, a connected offence punished under the heavier one.

Outcome: convicted of issuing false invoices (the heavier offence): 4 years 6 months, fine RMB 200,000.

Shenzhen Xunda Automobile Transport Co. and Chen Jinhui, obtaining loans by deception and contract fraud · (2019) 粤刑终181号 (Guangdong High People's Court · appeal · final)

Core facts / outcome: Xunda committed contract fraud with the purpose of illegal possession and also obtained bank loans and bill acceptance by deception causing a major loss. On appeal the sentences were adjusted: the company fined RMB 10 million for obtaining loans by deception; Chen Jinhui 5 years, fine RMB 3 million for that offence (13 years in total).

Zhou Ziming, obtaining loans by deception and unit bribery · (2018) 粤19刑初205号 (Dongguan Intermediate People's Court · first instance)

Core facts / outcome: obtained bank loans and bill acceptance by deception, especially serious circumstances; also unit bribery. 4 years, fine RMB 200,000 for obtaining loans by deception (5 years in total).

Zhang Jinhong (Shenzhen Benye Trading Co.), obtaining loans by deception · (2015) 深福法刑初字第1797号 (Futian District court, Shenzhen · first instance)

Core facts / outcome: the company obtained bank loans by deception causing an especially major loss; most of the loans were repaid during the proceedings and there was surrender, so a lighter sentence: company fined RMB 100,000, Zhang Jinhong 2 years 2 months, fine RMB 50,000.

7. People's Court Case Database / authoritative cases (database, typical and guiding)

The authoritative case databases returned 14 hits for "obtaining loans by deception" and 9 for "loan fraud". "Database cases" are those in the People's Court Case Database (rmfyalk.court.gov.cn); "typical cases" are released by the SPC / SPP and provincial high courts. Arranged below by relevance; the holdings can be cited directly.

7.1 Towards acquittal (very useful for "false statements but no loss")

Guangdong High Court typical cases on serving private enterprises · Huang Mouquan, acquitted of obtaining loans by deception 📄 View text [typical case · Guangdong]

Point: whether conduct in a company's operations is an economic dispute or a crime is a hard question. Through first instance, appeal and retrial the case went from conviction to acquittal, applying a restrained, prudent and benevolent approach to criminal justice and the principles of evidence-based adjudication and acquittal when in doubt — important for protecting private entrepreneurs.

A Jiaozuo company and Sun Mou, obtaining loans by deception 📄 View text [typical case · Henan · acquittal]

Point: apply criminal-law restraint to market actors and separate crime from non-crime. Where the bank knew the borrower was "borrowing new to repay old" and its internal documents set that out as the handling method, even if untrue materials were given in the refinancing, the bank is not the real victim and the loss has no criminal causal link to the deception, so it is generally not obtaining loans by deception.

An Inner Mongolia group and Guo Moujia, obtaining loans by deception · (2017) 内08刑终40号 [database case]

Point: providing false sales contracts, but where the mortgage contract was genuine, the loans were fully repaid at maturity and there was no loss to the bank or other serious circumstances, is not a crime. The offence should be judged by substance, not the outward form of deception.

Li Mou and others, obtaining loans by deception · (2017) 皖16刑终332号 [database case]

Point: the offence protects the security of credit funds; it is not meant to punish every non-compliant loan with criminal law. Where the guarantee is reliable or the collateral genuine and adequate and the bank suffers no major loss, the matter can be treated as a commercial loan dispute even if false materials were provided.

Jiang Moumou, obtaining bill acceptance by deception · (2022) 桂刑再4号 [database case]

Point: after Criminal Law Amendment XI, the threshold keeps only "causing a major loss"; where no major loss was caused, "an especially huge amount obtained" should not be equated with "other especially serious circumstances" to apply the second tier. Acquitted on retrial.

7.2 Directly on "false financial statements / audit reports" (towards conviction)

Huijin Company, Feng Tao and others, duty embezzlement and obtaining loans by deception — partly acquitted on retrial · (2023) 新刑再1号 [typical case]

Point / facts: the actual controller had finance staff give financial institutions false audit reports, balance sheets and income statements, obtaining four loans totalling RMB 125.6 million; later accounting vouchers and books were burned to wipe the records (suspected concealment / intentional destruction of accounting vouchers and books). On retrial, strictly applying the principle of legality, some defendants were acquitted and others re-sentenced — a warning that false statements + destroying accounts is a classic high-risk combination.

A Wuhan company and Wu Moumou, obtaining loans by deception · (2014) 鄂刑一抗字第00005号 [database case]

Point / facts: concealing continuing losses and providing false financial reports and receivables schedules to obtain RMB 20 million in bank factoring. Convicted of obtaining loans by deception (not loan fraud / contract fraud) because the purpose of illegal possession could not be found.

7.3 Which offence (changes on appeal)

Qiu Mouping, Tan Mou and others, obtaining loans by deception · (2023) 桂01刑终266号 [database case]

Outcome: loan fraud at first instance (13 / 12 years) → changed to obtaining loans by deception on appeal (6 / 4 years), for the "purpose of illegal possession" reasons above.

An Anhui power company, Liu Mou and others, obtaining loans by deception, contract fraud and loan fraud · (2021) 皖刑终90号 [database case]

Outcome: factoring finance obtained by pledging fake receivables. On appeal the company's contract fraud and loan fraud were changed to obtaining loans by deception (company fined RMB 500,000; Liu Mou 7 years) — the purpose of illegal possession should not be inferred merely from non-repayment.

Gong Moumou, obtaining loans by deception · (2018) 赣05刑终34号 [database case]

Outcome: used false identity documents for direct consumer instalment business, obtaining RMB 300,000; credit-card fraud at first instance (5 years) → changed to obtaining loans by deception on appeal (10 months).

Ji Moucheng and others, contract fraud · (2022) 京刑终65号 [database case]

Point: "other financial institutions" in loan fraud means institutions approved by the national financial regulators; microcredit companies approved by local financial regulators are not "other financial institutions", so defrauding them of loans is contract fraud.

Meng Mou, loan fraud · (2023) 皖16刑终208号 [database case]

Point: with no ability to repay, using business as a pretext and false certificates to obtain loans, then using them to repay other debts or for consumption, is loan fraud; money paid as "interest" is set off against principal in calculating the amount. Re-sentenced on appeal to 10 years.

Zhao Moumou, loan fraud 📄 View text [typical case · Guizhou · acquittal]

Point: where a loan was lawfully obtained but not used for the stated purpose and not repaid at maturity because of poor management or market risk, it should not be loan fraud; where the purpose of illegal possession cannot be proved reliably and sufficiently, the defendant is acquitted.

8. Overall risk warnings and compliance advice (inference · practical analysis)

"I never meant not to repay" is not a shield: the purpose of illegal possession is judged on the whole case, matching subjective and objective factors (repayment ability, use of funds, withdrawal or transfer, flight). Falsified statements themselves greatly weaken a "no purpose of illegal possession" defence.
Since 2021 "loss" is still a hard threshold, but don't rely on it: once the bank ends up with an actual loss (including from inflated collateral valuations or diversion of funds leading to non-repayment), the offence may be made out; the filing threshold is only RMB 500,000 in direct loss.
Genuine collateral, common in business loans, is an important defence: database cases (the Inner Mongolia group, Li Mou) say "genuine, adequate collateral + repaid at maturity + no loss" can mean acquittal or a civil dispute — provided the collateral valuation is not inflated and the loan was really used for the declared purpose.
Watch for related offences: false invoices to support the statements (issuing false invoices), an accountant's false audit report (providing false certification documents), destroying accounting books (concealing / destroying accounting vouchers), bank staff collusion (illegally granting loans / bribery) can all be added.
Unit vs individual: obtaining loans by deception can be a unit offence (company fined + directly responsible persons punished as individuals); loan fraud cannot. Where the loan was in the company's name, paid into its account and used in its business, it is usually treated as a unit offence, and the boundaries of personal liability and restitution differ (see Xie Heng).
If the bank is already pursuing you or a case has been filed: immediately preserve genuine business records, the flow of funds and evidence of willingness to repay, assess the two defences of "purpose of illegal possession" and "whether a loss was caused", and if necessary defend actively on classification (loan fraud vs obtaining loans by deception vs not guilty).

Appendix: original judgments and notes on the texts

Published court judgments and case databases were searched case by case, yielding: 34 full judgments (verbatim; click a case number or "📄" to open), 11 People's Court Case Database texts, 7 typical-case releases and 1 case with no judgment text. Every case number in the report links to its text (in Chinese). Full index and notes:

📄 Cases with viewable text (53 entries, in order of appearance)

(2024) 粤1521刑初64号 Full judgment · Ye Mouyan, obtaining loans by deception, first-instance criminal judgment
(2024) 粤1521刑初261号 Full judgment · Liu Mouquan, obtaining loans by deception, first-instance criminal judgment
(2024) 粤1523刑初59号 Full judgment · Li Mou, Huang Mou and others, obtaining loans and bill acceptance by deception, first instance
(2022) 粤1502刑初285号 Full judgment · Lin Mouhe, obtaining loans and bill acceptance by deception, first instance
(2023) 粤0117刑初113号 Full judgment · Jiang Mouming, Jiang Mouzhao and others, obtaining loans, bill acceptance and financial instruments by deception…
(2021) 粤0281刑初53号 Full judgment · Lai Shuihua, obtaining loans, bill acceptance and financial instruments by deception…
(2021) 粤0105刑初37号 Full judgment · Huang Moubin and Li Mouxi, obtaining loans, bill acceptance and financial instruments by deception, first instance
(2023) 粤1481刑初197号 Full judgment · Chen Mou, loan fraud and obtaining loans by deception, first instance
(2021) 粤1521刑初78号 Full judgment · Zhong Niang-he, obtaining loans, bill acceptance and financial instruments by deception, first instance
(2021) 粤1521刑初23号 Full judgment · Wu Xiaoqiong, same offence, first instance
(2020) 粤1323刑初855号 Full judgment · Li Guoliang, same offence, first instance
(2020) 粤5224刑初353号 Full judgment · Huang Hanchun, same offence, first instance
(2020) 粤1971刑初3438号 Full judgment · Ye Dan, same offence, first instance
(2020) 粤1521刑初375号 Full judgment · Liu Bizhen, same offence, first instance
(2020) 粤1521刑初319号 Full judgment · Chen Guocheng, same offence, first instance
(2020) 粤1521刑初310号 Full judgment · Dai Guohua, same offence, first instance
(2020) 粤0305刑初571号 Full judgment · Wang Jian, same offence, first instance
(2020) 粤0606刑初695号 Full judgment · Zeng Lifeng, same offence, first instance
(2020) 粤1523刑初52号 Full judgment · Huang Huafeng, same offence, first instance
(2026) 粤19刑终594号 Full judgment · Chen Mou, loan fraud
(2024) 粤刑终646号 Full judgment · Lin Moumou, loan fraud, appeal judgment
(2024) 粤1971刑初1110号 Full judgment · Ye Mouxuan, Yang Moubao and others, loan fraud, first instance
(2024) 粤1971刑初2969号 Full judgment · Zhou Mouwu, Yan Mou and others, loan fraud, first instance
(2024) 粤1971刑初4811号 Full judgment · Ma Mouyan, Liu Moufen and others, loan fraud, first instance
(2023) 粤0204刑初166号 Full judgment · Li Mouwu, loan fraud, first instance
(2024) 粤1623刑初178号 Full judgment · Liu Mouyi and Lian Mou, loan fraud, first instance
(2025) 粤0705刑初885号 Full judgment · Li Moumou, loan fraud, first instance
(2026) 粤1971刑初1014号 Full judgment · Wang Mou, loan fraud, first instance
(2026) 粤1971刑初119号 Full judgment · Xie Mou, loan fraud, first instance
(2016) 粤0811刑初141号 Full judgment · Zheng Moumou, false invoices and obtaining loans by deception, first instance
(2019) 粤刑终181号 Full judgment · Shenzhen Xunda Automobile Transport Co. and Chen Jinhui, contract fraud and obtaining loans by deception
(2018) 粤19刑初205号 Full judgment · Zhou Ziming, contract fraud and obtaining loans by deception
(2015) 深福法刑初字第1797号 Full judgment · Zhang Jinhong / Shenzhen Benye Trading Co., obtaining loans by deception
(2023) 桂01刑终266号 Database text · Qiu Mouping, Tan Mou and others, obtaining loans by deception
(2014) 鄂刑一抗字第00005号 Database text · a Wuhan company and Wu Moumou, obtaining loans by deception and fraud
(2018) 赣05刑终34号 Database text · Gong Moumou, obtaining loans by deception
(2017) 皖16刑终332号 Database text · Li Mou and others, obtaining loans by deception
(2017) 内08刑终40号 Database text · an Inner Mongolia group company and others, obtaining loans by deception
(2022) 桂刑再4号 Typical-case release · SPC retrial cases on protecting private enterprises' property rights and entrepreneurs' rights
(2021) 鲁03刑更178号 Database text · Liu Mou'an, parole ruling (obtaining loans by deception)
(2016) 浙06刑终635号 Database text · Han Moulong, money laundering
(2021) 皖刑终90号 Database text · an Anhui power company, Liu Mou and others, obtaining loans by deception, contract fraud, loan fraud
(2023) 皖16刑终208号 Database text · Meng Mou, loan fraud
(2022) 赣0826刑初163号 Database text · Li Mou and Wang Mou, loan fraud and money laundering
(2022) 京刑终65号 Database text · Ji Moucheng and others, contract fraud
(2023) 新刑再1号 Typical-case release · SPC retrial cases on protecting private enterprises' property rights and entrepreneurs' rights
Jiaozuo courts' business-environment typical case no. 3: a Jiaozuo company and Sun Mou, obtaining loans by deception Typical-case release
Guangdong High Court typical cases serving private enterprises (II), no. 1: Huang Mouquan Typical-case release
Provincial courts' ten typical cases protecting private enterprises, no. 10: Zhao Moumou, loan fraud Typical-case release
Provincial courts' ten typical cases protecting private enterprises, no. 2: Zhang Moujia and Zhang Mouyi Typical-case release
Jiangsu courts' typical telecom-fraud cases, no. 5: Wang Zhaoxuan and five others Typical-case release
(2017) 粤12刑终191号 Full judgment · Xie Heng, obtaining loans, bill acceptance and financial instruments by deception, appeal judgment

Notes: (1) "Full judgment" = the original judgment from the published judgment database (findings, reasoning, outcome), citable directly; (2) "Database text" = published in the case-database format (keywords, holding, facts, related provisions); the database does not publish the judgment text for these, so the full judgment could not be added; (3) "Typical-case release" = the SPC / high court release text, not the original judgment; (4) for Bian Moushan ((2021) 兵1002刑初10号) no judgment text was found in the public database, only the database holding (listed in section 3), so the full text could not be added.

Quick answers

Is it a crime in China to submit falsified financial statements to get a bank loan?: It can be. Falsified statements are "deceptive means" for obtaining loans by deception (Criminal Law Art. 175-1) and "false certification documents" for loan fraud (Art. 193). Which offence, if any, depends on whether there was intent to illegally possess the money and whether the bank suffered a major loss.
What is the difference between loan fraud and obtaining loans by deception in China?: Loan fraud requires intent to illegally possess the loan, can only be committed by individuals and carries up to life imprisonment. Obtaining loans by deception does not require that intent, can be committed by companies, requires a major loss to the bank (filing threshold RMB 500,000 direct loss) and carries up to seven years.
If I repaid the loan on time, can I still be prosecuted for obtaining a loan by deception?: Generally not since Criminal Law Amendment XI (effective 1 March 2021) removed "other serious circumstances" from the basic offence: the bank must have suffered a major loss. False documents can still lead to contract termination, early recall of the loan, credit-record damage and regulatory penalties.
How do Chinese courts decide whether there was intent to illegally possess a loan?: By looking at the whole case: repayment ability and debt structure when applying, whether there was real business activity or a real project, how the loan was used, repayment, and whether funds were withdrawn, transferred or assets hidden or the borrower absconded — not simply the fact that the loan was not repaid.

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