What began as a run on a handful of provincial banks is rapidly morphing into one of China’s worst financial scandals, threatening the stability of the country’s heavily indebted financial system. It poses a serious challenge to a Communist party obsessed with social order, which has thuggishly cracked down on desperate depositors demanding their money back.
At the weekend, protesters in Henan’s capital Zhengzhou were charged, beaten and dragged away by unidentified security officials dressed in white shirts and dark trousers, who appeared to be working in concert with uniformed police. An estimated 1,000 angry depositors had gathered in front of a branch of the People’s Bank of China, carrying banners that read ‘We are against Henan government’s corruption and violence’ and ‘No deposits, no human rights’. They chanted, ‘Henan banks, give me my money back’ and one protester reportedly pasted pictures of Mao Zedong on pillars in front of the bank.
Some of the protesters suffered broken bones and eye injuries. The ugly scenes rapidly circulated on Chinese social media but were quickly deleted by CCP’s censors. The first scandal emerged in April when four provincial banks suddenly suspended online cash withdrawals, freezing the deposits of thousands of people. The local authorities claimed ‘criminal gangs’ had taken control of the banks and siphoned off the funds through illegal transfers and fictitious loans worth as much as 40 billion yuan (£5…
