One Monday last month, Yang Baoyu joined about 200 people in front of the city offices in Xinxiang for a familiar ritual, waving protest banners and demanding help from the government to recoup their lost investments. As WSJ's Chuin-Wei Yap reports:

As with many of the other demonstrators, the engineer, 45 years old, had been coming to protest nearly every week since he lost his nest egg of about $37,000 to a company named Henan Tengfei Investment Wealth Management, which collapsed in 2014. City officials emerged and promised to resolve the investors’ concerns, Mr. Yang says. Then about 600 police officers descended...