Social unrest is on the rise in China, triggered by a range of financial services related issues, across deposits and mortgages, with ordinary Chinese people are publicly revolting, with rapidly escalating boycotts on mortgage payments spread across at least 301 projects in about 91 cities.
In addition there were large-scale protests in the Henan province by bank depositors over the release of their frozen funds over what may be the nation’s biggest-ever bank scam. The incident comes in the light of the Henan branch of the Bank of China declaring that people’s savings in their branch are ‘investment products’ and can’t be withdrawn.
Authorities say they started repaying some victims last week even as a police investigation is still ongoing. But Chinese state media has not posted anything about the repayments.
The Henan bank scandal, in which 40 billion yuan (US$6 billion) in deposits have disappeared, is more than a Chinese banking crisis – it is a political crisis that could undermine people’s confidence in local governance and also other local banks, according to analysts.
The blow to public confidence in financial stability and the government’s ability to protect their legitimate interests could be a long-term issue, unless the central government can find ways to promptly repay the depositors, they say.
Police in central China’s Henan province have arrested a number of suspects allegedly involved in a “complicated” cash crisis involving rural banks, while investigators continue to search for the whereabouts of customers’ missing deposits.
The arrests come after months of protests from anguished savers, who have been unable to withdraw cash from their accounts at small rural banks in Henan and Anhui provinces.
The case has highlighted the vulnerability of lenders in China’s less-developed regions as the risk of recession grows in the world’s second largest economy.
The Chinese Communist Party’s tanks on Wednesday rolled on the streets to scare Henan bank protestors amid large-scale protests in the province by bank depositors over the release of frozen funds.
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