A shocking video from China’s Henan Province went viral on Wednesday. The video has shown the tanks being lined up on China’s streets to prevent its citizens from withdrawing money from crisis-hit banks. Widespread demonstrations are being staged by the bank depositors in the province, demanding the release of their frozen funds.
The issue of Chinese banks facing losses came forward in April this year when an article from the South China Morning Post claimed that residents of Henan and Anhui provinces were unable to access their bank accounts due to, what they termed, a “system upgrade.”
History to repeat itself.
The shocking video has sparked debates on social media about whether 1989’s event may repeat itself. On June 4, 1989, the repressive crackdown was carried out at Tiananmen Square, where student demonstrators had congregated for weeks to demand democracy and more freedoms. The protestors were cleared by the Chinese leadership using tanks and heavily armed troops. The crackdown brutally killed hundreds of peaceful protestors.
Current crisis in China.
The Henan region of the nation has seen conflicts between police and depositors over the past few weeks. The latter claim they have been unable to withdraw their cash from banks since April of this year.
After the conflicts turned violent, Chinese authorities assured the protestors that their funds will be released in batches, with the first due on July 15. However, only a Few depositors have received payouts, which raises the critical question of whether banks have cash or not.
Cause of crisis.
According to non-mainstream Hong Kong media, allowing such incidents to escalate (like the Zhengzhou bank protests) demonstrates that these banks do not have money to spare.
Land leasing provides local governments with a sizeable portion of their income, particularly when it comes to real estate developers. However, because there are so many unfinished projects, many construction companies have stopped purchasing new land, which hurts the revenue of local governments.
Meanwhile, Zheng Yuhuang, a professor at Beijing’s Tsinghua University, claimed in a video that 2022 will be a challenging year for China. According to Zheng, 4,60,000 businesses will close in China in the first half of the year, 3.1 million industrial and commercial households will be written off, enterprise liquidation will increase by 23% year over year, and 10.76 million college graduates will enter the workforce under heavy employment pressure, and 80 million young people will be unemployed.
According to media reports, the delay in addressing the suspension of loan repayment by homebuyers is because, aside from senior officials directly in charge of urban development and real estate, nearly every successful real estate developer is a member of a powerful family within the Chinese Communist Party.
In order to get their development approved, regular real estate developers must pay government representatives at all levels.
Henan Protest.
White-clad men, who are reportedly members of the Chinese People’s Armed Police Force, dispersed protests in front of the Zhengzhou branch of the People’s Bank of China (PBoC) during the widespread bank depositor protests in Henan province demanding the release of frozen funds, according to local media.
On July 10, 2022, more than a thousand depositors had gathered in front of the nation’s central bank’s Zhengzhou branch to commence their biggest-ever protest. Numerous protests by hundreds of depositors were held in Zhengzhou, but the Chinese government disregarded their requests.
