China’s history with multi-level marketing is often flattened into a slogan. The usable version for consumers is simpler. Classic pyramid-style recruitment (entry fees, “headhunting”, team-based pay from downlines) is prohibited under anti-pyramid rules. Separately, the state allows a tightly defined form of direct selling (zhíxiāo) for companies that hold a licence from the Ministry of Commerce (MOFCOM).
MOFCOM’s own guidance stresses the difference: licensed direct selling is mainly single-level sales to end consumers, with service outlets and capital rules; a direct-selling licence is permission to sell that way, not a badge that makes multi-level team commissions legal. Lists of licensed firms are published through official commerce channels (including the MOFCOM direct-selling management site). Brand names on marketing slides are not a substitute for that register.
Why this matters outside China: crypto and “global partner” schemes often claim Chinese legitimacy while paying for recruitment. Ask for the exact licensed legal name, compare it to the official list, and ignore screenshots. If income depends on signing up others rather than selling a real product to end users, treat it as a pyramid pattern regardless of the flag on the brochure.
If this pattern matches something you’ve been offered, start at Get help.
This article is for general information only. It is not legal or financial advice. Details change. If you have lost money, contact your bank or card issuer and use the routes on the help pages.