China’s fast-and-loose financial practices have caught up with the country and now threaten to bring down the world’s No. 2 economy.
According to video clips posted to social media, the Chinese government is deploying tanks and armed troops to surround banks in order to prevent citizens from withdrawing their money and collapsing the cash-strapped financial institutions.
One post on Twitter noted: “BREAKING: Tanks have been deployed on on the streets of China to protect the banks — Due to the Henan branch of the Bank of China declaring that people’s SAVINGS in their branch are now ‘INVESTMENT PRODUCTS’ and can’t be withdrawn.”
?BREAKING: Tanks have been deployed on on the streets of China to protect the banks — Due to the Henan branch of the Bank of China declaring that people’s SAVINGS in their branch are now ‘INVESTMENT PRODUCTS’ and can’t be withdrawn (WallstreetSilver)
— HeadlineHunter! ? Alerts (@headlinehunter_) July 20, 2022
According to the South China Morning Post:
Customers caught up in one of China’s biggest banking scandals have been asked to “wait patiently” to receive their compensation amid growing concerns over systemic risks and social instability.
Deposits at four banks in Henan province and one in neighbouring Anhui have been frozen since mid-April, leading to protests from disgruntled customers.
Some savers with deposits of less than 50,000 yuan (US$7,400) received their money as promised on Friday, although others encountered a string of problems while trying to register for the repayment scheme due to an overloaded system.
“The action plan is to repay the principal of these customers in batches,” said an unnamed official from the China Banking and Insurance Regulatory Commission (CBIRC) in an interview with the state-owned China Banking and Insurance News in what was an exceedingly rare, yet wide-ranging, interview published on Sunday, the SCMP noted.
The official went on to note, however, that it will take the Chinese authorities an undetermined amount of time to gather information on an exceedingly large number of customers and perform the pertinent analysis to determine what to pay out because the original data has been ‘removed,’ the SMCP added.
“The accounts at Yuzhou Xinminsheng Village Bank, Shangcai Huimin County Bank, Zhecheng Huanghuai Community Bank and New Oriental Country Bank of Kaifeng in Henan province and Guzhen Xinhuaihe Village Bank in the Anhui province have been frozen since April 18,” the paper reported, noting that it has already been months since customer assets were frozen.
The outlet noted that a preliminary probe revealed that the Henan Xincaifu Group had gained control over five rural banks via “internal and external collusion” while “illegally” attracting deposits from customers who contributed to savings accounts, the CBIRC noted.
The company then hid its illegal actions by faking its business data also to cover up the fact that it had not paid any interest on those deposits, the CBIRC noted further.
During the interview, the CBIRC official pushed back on the claim that the regulator only offered compensation after several protests, one that resulted in demonstrators being attacked earlier this month, noting that the crisis was handled “in accordance with laws and regulations.”
But that official did not mention the incident on July 10 in Zhengzhou, the capital of the Henan province, and only referred to a “group visit incident” that was censored on Chinese social media.
Meanwhile, China is also experiencing a widening mortgage boycott among consumers who are refusing to make loan payments on their purchased apartments because the construction companies, which are also experiencing a cash flow deficit, have stopped working on them.
“The list of Chinese homebuyers refusing to pay their mortgages is growing. It’s gotten so severe that experts are calling it a threat to the country’s financial system. Chinese authorities held an urgent meeting with banks to discuss the situation. But for now, many are left wondering if it’s already on a collision course,” NTD News reported.
China is on the precipice of a major economic collapse.
Source material can be found at this site.