Still, it will now be up to the government to decide how to address the losses both in Henan and those yet to be revealed, said Michael Pettis, a professor of finance at Peking University. China’s central bank said last week that 99 percent of China’s banking assets were “within the safe boundary.” The government has sought to downplay concerns about a broader problem. The country’s seemingly unstoppable growth over the past few decades had encouraged speculative borrowing and lending behavior by everyone from online lenders to major real estate companies. There are most likely hidden debts spread across China’s financial sphere. As a result, Professor Chen said, “I expect to see more rural banks having to face the same kind of problems as the Henan rural banks.” But recently, the government has signaled that those days are over, even as the deteriorating economy has put more pressure on those same institutions. Historically, the resulting losses were manageable, because the central government was willing to bail out troubled banks and businesses, he said. Professor Chen, in Hong Kong, said county- or village-level governments often exerted undue influence over local bank managers, leading them to make risky or even fraudulent loans. Indeed, the scandal has raised broader questions about who is accountable for the lost money, besides the suspected criminals. Even if the depositors sued for repayment and won, he added, the bank might not have adequate assets to make them whole, and it was unclear if the state would make up the difference. “The other party is eager to characterize it as illegal - they’ve described it four or five different ways - because they don’t want to take responsibility,” he said of the authorities. But he acknowledged that, in reality, they might have little recourse. Huang Lei, a lawyer in the eastern city of Hangzhou who has worked on fraud cases, said people who had unknowingly participated in an illegal scheme should still be entitled to repayment.
According to the police, the gang’s scheme included setting up illegal online platforms to solicit new customers. Those stipulations were seemingly a nod to the police’s announcement about the suspected criminal gang. They also said they would not repay anyone who had used “additional channels” to obtain higher interest payments or those suspected of dealing with “illegal funds.” Censors blocked trending hashtags, but users created new ones.Īs the outrage continued, regulators promised last week to repay the depositors - but only those who had put in less than 50,000 yuan, about $7,500, with details for the rest to be announced later. Commenters said the government had betrayed the protesters’ faith. Men in plainclothes began hitting and kicking the protesters.įootage of the violence, which was viewed tens of millions of times on Chinese social media, provoked widespread fury. They were met with ferocity all the same. Xi’s slogan of the “Chinese Dream” or carried a portrait of Mao Zedong. Many of the demonstrators presented their demands as appeals, rather than challenges, to the Communist Party’s authority. But after the manipulation attracted widespread condemnation, local officials retreated, and protesters continued to gather, including on July 10. The local authorities manipulated depositors’ mobile health codes - digital indicators that China uses to track coronavirus infections - to bar them from entering public spaces.
Censors shut down protesters’ messaging groups.
Immediately, officials tried to silence them. Building a Security Fortress : Taiwan, Covid, “color revolutions”: China’s leader, Xi Jinping, is seeing threats everywhere, and he is enlisting the whole nation to defend against them.Real Estate Crisis: As China’s economy stumbles, homeowners who bought property from indebted developers are boycotting mortgage payments on unfinished properties.A Globetrotting Diplomat: While Xi Jinping hasn’t visited a single foreign country during the pandemic, his foreign minister, Wang Yi, has been to dozens, extolling Beijing’s vision for the world.Extreme Heat: A record-setting drought and an 11-week heat wave in China have crippled huge hydroelectric dams, forcing cities to impose blackouts and driving up the country’s use of coal.
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