Visuals of tanks on the streets of Chinese provinces in the midst of a worsening banking crisis have led to alarms from Beijing-watchers on the Internet. The numbers already show a bleak scenario. Latest GDP data reveals China’s slowest economic growth since early 2020. Several clips of tanks being deployed outside banks in Henan province have brought back memories of the brutal crackdown of 1989 – The Tiananmen Square Tragedy – for many. While Beijing is silent on the tanks, some media reports claim that the local administration has asked depositors to ‘remain patient’. So, what exactly is this crisis and how bad is this situation in China? Here’s what we know so far:
1: Trouble started back in April when four banks in Henan and one in nearby Anhui informed their customers that they would not be able to withdraw money as their accounts were being frozen. These banks — Shangcai Huimin County Bank, Yuzhou Xinminsheng Village Bank, New Oriental Country Bank of Kaifeng and Zhecheng Huanghuai Community Bank along with Anhui’s Guzhen Xinhuaihe Village Bank — have not been able to function due to frozen accounts since April 18.
2: Financial irregularities are being seen by many as the reason behind such drastic measures. Initial probe reveals that the powerful Henan Xincaifu Group, which holds stake in all these banks, had taken over these financial institutions and misled the investors for public funds using digital platforms.
3: Since late April, sporadic protests have been reported from the provinces. However, one of the major stirs was held on July 10 when over 1,000 angry customers lined up outside one of these banks demanding their hard-earned money be returned to them. Local police and men in white shirts reportedly attacked the protesters to quash the dissent. A South China Morning Post report says that data collected during the coronavirus pandemic is allegedly being used to track the protesters. Some of the dissenters said that they noticed ‘code red’ on their mobile phones when they tried to use public transport. This system has been in place to check the viral transmission, but new testimonies from Henan reveal that the surveillance mechanism may have been deployed to zero-in on those involved in protests.
4: Meanwhile, officials from the China Banking and Insurance Regulatory Commission say that a plan is already ‘in place’ and the ‘principal amount’ of all customers will be paid in instalments. The official line is that the ‘repayment plan’ will take time as the original customer data has been removed.
5: From Reddit to Twitter, several social media platforms have seen viral clips of armoured vehicles being deployed right outside banks in Henan. It is being said that tanks were being positioned to dissuade customers from protesting and demanding their money back.