For months China has been drowning in an announced financial crisis, which has intensified in recent months, and banks have frozen their customers’ money to cushion the problem. This situation of uncertainty has generated complaints and anguish, and some claim that the amounts withheld amount to tens of billions of yuan.
Such is the case of a bank employee in Sichuan province, who panicked and took the risk of telling about the terrible economic situation the bank was going through.
The man commented anonymously on social networks that his bank could not grant new loans: “The leek refuses to grow, and the sickle is in panic.” He added: “All sorts of ways of drinking poison to quench the thirst have emerged, such as hanging interest and transferring capital, and paying debts with capital.”
He also stated that “the Chinese economy is coming to an end, just like the end of the world.”
Failed Chinese banks
The Chengdu bank employee in charge of controlling financial risks explained that Chinese banks are not paying attention to the consequences of carelessly using customers’ money and using it to pay debts to reduce interest rates, which is a potential risk. He also commented that it is very common to lend to shell companies, owners of disputed companies, and properties with low mortgage value.
On the other hand, the bank employee stated that the real estate system in China is really out of control: reducing down payment rates and interest rates, even granting mortgage loans on a large scale to encourage consumers to buy homes. In this regard, the number of foreclosures has increased substantially. In addition, the bank employee revealed that in small towns such as Douyin, “fire sales” of real estate are commonplace.
Banks hold citizens’ money
The serious situation has spread to all banks in China, which have restricted money withdrawal by their customers.
Customers protested in front of the Henan Supervision Bureau and the Henan Banking and Insurance Regulatory Commission, shouting, “Henan Bank return my savings!” according to Apollo News.
For weeks now, three banks in Henan have prevented customers from withdrawing their money, prompting protests with placards reading, “Three commune banks in Yuzhou, Shangcai, and Tuocheng in Henan do not allow withdrawals. Please Henan Banking, and Insurance Regulatory Commission decide for the people!”.
At the protests, the demonstrators said, “Give me back my deposit!”.
China’s Shenzhen Shiyan Bank, Agricultural Bank of China, and Shanghai banks quietly restricted withdrawals and limited withdrawals to $150 per day without notifying customers and have also shortened their service hours. Yet, at the same time, most banks have long lines of people waiting to be served.
All banks in Zhengzhou froze their customers’ savings. A citizen surnamed Hang, from Liaoning province, said, “It has affected me a lot since April 18. I can hardly eat or sleep,” according to South China Morning Post.
Hang and his parents have a total of $128,000 in savings in three of the four banks that held their money.
Strange movements in the Bank of Nanjing
The Bank of Nanjing’s situation caught the attention of Chinese social networks for its strange movements. On July 1, Ming Fei, an analyst at Western Securities, was fired after disclosing the bank’s debt crisis. Then he allegedly died from unknown causes, according to social media reports. The bank’s president resigned, and financial executives from large corporations immediately took the position temporarily to “stabilize financial risks.”
Fei had posted on his social networks and commented among his circle of friends that the Bank of Nanjing’s deficit came from debts caused by the Chinese regime and not from mismanagement of investments. He also reported that the bank was not sourcing money from customers but pensions, social insurance, and provident funds. He added that the bank granted loans only for industrial enterprises, the purchasing of real estate, and the regime’s projects.
According to WeChat reports, on Saturday, July 2, Western Securities confirmed Fu Mingfei’s death, which occurred on June 30, 2022, between 18:00 to 18:50. The causes are not yet known, nor has the bank ratified the information.
A bank official explained that they fired the employee because of the uproar he caused with his comments and that Bank of Nanjing President Lin Jingran resigned because of a job change. However, the official had not yet completed his two-year term of office.
On July 3, the Bank of Nanjing unexpectedly issued a statement announcing that the bank would use a new name: “Bank of Nanjing Co., Ltd. Explaining that due to long service life and serious wear and tear, the name or seal would be changed, “to facilitate the smooth running of various tasks, our bank decided to replace the seal.'”
The financial crisis is out of control in China and seems to worsen by the day. People’s anguish is increasing with the possible loss of their savings and investments and the potential risks of recession in the country. Markets are down, and several foreign companies are leaving the Asian territory. Will China be able to overcome the serious crisis?