Henan depositors’ rights protests are violently suppressed
A protest rally broke out in Zhengzhou, the capital of China’s Henan province, on Sunday (July 10), as hundreds of village bank depositors confronted police and were beaten by unidentified people at the scene. The photos and videos have spread on Chinese social media, sparking outrage. While protest photos are often quickly censored in China, the video from Zhengzhou continued to circulate widely on Monday, with a related hashtag on Weibo viewed 32 million times.
The New York Times reported on July 12 that although the protests were focused on four village banks in Henan province, China’s economy is slowing across the board, and the impact of the CCP virus (new crown) epidemic blockade is also expanding, which may cause more Problems with financial institutions were exposed and put China’s deposit insurance mechanism to the test.
In China, the maximum deposit limit for full repayment is 500,000 yuan, or about $74,500, but at the four banks in Henan, many customers have much larger deposits. If the government determines that the deposits of these customers are part of an illegal fund-raising scheme, their efforts to recover their deposits could face further resistance.
Many protesters said they had banked their life savings and are now destitute. Depositor Feng Tianyu said she had saved 1.11 million yuan, which was all her savings plus her father’s pension.
She said, “I’m pregnant and I’ve come this far because the money is really important to me. If the money doesn’t come back, I can’t have a maternity check, I can’t have this child, and I can’t continue to support me. Our two-year-old daughter.”
The depositor, Mr. Yu, said he had deposited all of his family’s savings of 1 million yuan in the bank. There’s nothing left now.
A 28-year-old Ms. Li said she had deposited 200,000 yuan in Yuzhou Xinminsheng Bank, one of the institutions involved. The money represented 90 percent of her total savings.
On July 10, she took a train to Zhengzhou from Shaanxi province, where she lives. Although she escaped the violence of undercover agents, she said in shock: “It’s unbelievable that something like this happened. We feel completely helpless.”
Protesters have said in interviews that the pressure of public opinion is now their only avenue for recourse.
“It’s really too powerless to speak out alone, we can only get the government’s attention when we get together,” said Zhang Xia, a 38-year-old administrative assistant from the eastern city of Hangzhou.
According to reports, the funds involved in these banks currently exceed 39 billion yuan, and hundreds of thousands of depositors are affected. Several rural banks in financial crisis were actually controlled by Henan New Fortune Group, which was suddenly cancelled in February 2022.
Chinese media “Sanlian Life Weekly” reported that most of the bank customers affected by the scandal were not from Henan. Skystar Finance, etc.), which are mainly attracted by deposit services with higher interest rates.
Foreign media widely concerned about the beating of Henan depositors for their rights protection
Thunderstorms at Henan Village Banks and thousands of victimized depositors were violently suppressed in large-scale protests, arousing widespread international attention.
According to incomplete statistics from Voice of Hope reporters, Australian media ABC on July 10, Washington Post on July 10; New York Times on July 11, United Press International (UPI) on July 11, Qatar Al Jazeera (Aljazeera) ) July 11, Wall Street Journal July 11, Bloomberg July 11, Indian media Republicworld July 11, Asianews July 11; The Guardian July 12, UK The BBC reported on the incident on July 12.
Due to the economic downturn, the capital chain of real estate enterprises has been broken, and the real estate developed by them has been unfinished one after another. Many owners face the risk of “empty money and housing”. In the middle of this year, the phenomenon of “suspending loans and supplying supplies” by homeowners broke out in a concentrated manner.
According to Fengcai news statistics from Fenghuang.com, since July, owners of about 19 real estate projects in more than 12 cities in China’s six provinces have initiated “compulsory loan suspension notices” to protest against the unfinished projects that prevent owners from being able to repossess their houses. According to the information in the “Notice”, there may be more than 50,000 households with rights protection owners.
According to the report, this is just a group of homeowners who initiated a call for compulsory loan suspension in public writing, and did not defend their rights in this way.
According to the Fengcai News of Fenghuang.com, the real estates that caused the disputes over “the owner’s compulsory loan suspension” include: Kangqiao Nayunxi, Zhengzhou City, Henan Province, Zhengzhou Xinyuan Mingjia Phase IV, Zhengzhou Mingmen Cuiyuan, Zhengzhou Haochuang Wutong Mingzhu, Zhengzhou Yongwei Golden Bridge Xitang, Zhengzhou Qifu, Shangqiu City Evergrande City Phase II, Nanyang City Sunshine City Lijing Garden, Luohe City Evergrande Yuefu, Zhoukou City Evergrande Times New Town, Xinxiang City Evergrande Phase III and a half City Lake; Xinli City, Nanchang City, Jiangxi Province, Evergrande Longting, Jingdezhen City; Greenland Galaxy Painting, Wuhan City, Hubei Province, Wuhan Evergrande Times New Town; Changsha City, Changsha City, Hengtai Changsha Furong Yuefu, Changsha City Xinli Platinum Park; Shanxi Taihe Jinzun House, Taiyuan City, Jiangsu Province; Evergrande Yuelan Bay, Suqian City, Jiangsu Province…
Mr. Qing, the owner, said that now a large number of owners have no houses to live in, and they still have to pay their mortgages. It is also a big problem for children to go to school. The house has already “dragged down” some families.
Another owner, Wang Jun, said that choosing to “stop the loan” to protect their rights is also a helpless move. The two children spend 5,000 yuan per month on kindergarten, plus the pressure of rent and loans, and the setbacks in his and his wife’s work, life is really difficult. Hold up.
Real estate has always been an important lever to drive China’s economy, and real estate and its related industries account for about 30% of China’s GDP.
Deutsche Welle reported that 60% of China’s wealth is hidden in concrete, and if the real estate market collapses, there will be serious consequences and political implications.
Taiwan media “Freedom Finance” reported on July 12 that a depositor run incident broke out in Henan Bank recently. Deposits of depositors were frozen, and the run tide even went from Henan to Dandong, Liaoning. In fact, in April this year, banks including Agricultural Bank of China, Shanghai Pudong Development Bank, China Everbright Bank and other banks had similar phenomena. The market doubted that the local government had embezzled deposits from depositors due to the avalanche of real estate and financial difficulties, and they could not make up for it in a while, so they limited the withdrawal limit of the public. . People continue to take to the streets to protest, and the local government has resorted to a trump card to arbitrarily change the health codes of thousands of depositors to red codes on the grounds of epidemic prevention, causing public outrage.
The report believes that the bank run incident is related to real estate. In the past, many banks loaned money to real estate. Now the real estate market is not good, and the loan cannot be recovered. This is a problem that almost all banks in China may have.
The news that depositors whose deposits in the bank accounts of four villages and towns in Henan were cleared to protest against the crackdown also attracted the attention of Le Monde.
Le Monde reported on July 11 that at dawn on July 10, hundreds of depositors gathered in front of the Zhengzhou branch of the People’s Bank of China to protest. In videos uploaded on social media, they can be seen holding a banner that reads in white on a black background: “Say no to the corruption and violence of the Henan government! The Chinese dream of 400,000 families is shattered.”
Near noon, hundreds of men in plainclothes burst into the crowd, and depositors were beaten and dragged onto a bus. According to the demonstrators present, “They are all young men in their twenties, and they attacked very hard. … A man wearing glasses was beaten with blood all over his face, bleeding from his forehead to his nose.”
Since April 18, depositors have found that their money in four banks in Henan province cannot be cashed. The bank’s APP or the bank’s cash machine shows that the system is being updated. The CCP’s central bank launched an investigation, accusing a financial platform of “illegal fundraising” on behalf of four banks. As the weeks passed, the situation got worse.
The case began to spread across the country in early June when dozens of angry savers found their health codes turned red. On Chinese social networks, the politically motivated use of health codes to restrict the movements of depositors has alarmed millions of netizens. Central Chinese authorities eventually stepped in and punished several Zhengzhou officials.
At the end of June, the police announced that several people had been arrested, and the police statement said, “This case involves a previous old case, a large number of suspects, and a complex plot.”
The actions of the Chinese authorities and the police have made depositors increasingly uneasy, and more and more depositors have come together to speak out.
The French newspaper Le Monde reported that the incident showed that China’s economic woes could soon turn into “social unrest” feared by Beijing. Because behind the relevant four banks, there are 4,000 rural banks in a worrying situation.
“These little-known local banks usually offer very high interest rates to attract savers,” said Wang Dan, chief economist at Hong Kong’s Hang Seng Bank. “They lend the money they raise to local governments, state-owned enterprises, especially to very Risky real estate developers. But recently, in real estate, there have been a lot of defaults.”
Wang Dan said, “It is surprising that the CCP’s central bank did not intervene: in China, the guaranteed amount of deposits can reach 500,000 yuan, and there should be no such panic.”
According to Caixin magazine, the amount involved could be equivalent to 1.5 billion euros. “If people start to fear and try to withdraw money, the risk of spreading is high,” the economist warned. “Today, nine banks have been affected. The banking system is very sensitive to such feelings.”