Chinese Authorities Crack Down as Panicking Citizens Make Runs on Banks
Cracks that were already beginning to show are now becoming even more apparent as strained global relations and COVID-19 restrictions appear to have citizens wary of the nation’s economy.
Now, authorities are cracking down in an attempt to prevent a full collapse of confidence in the country’s financial system.
The most recent trouble came Aug. 3, as citizens made a run on the Bank of Huludao in Liaoning Province, China, according to The Epoch Times.
Customers packed the lobby one day after news broke that former bank president Wang Xueling was being investigated for allegedly violating Chinese Communist Party law.
This only compounded earlier fears likely sparked by sharply declining bank profits.
Concerns about the bank’s viability, often branded “rumors” by the Chinese government, only added to customers’ worry. Police have reportedly identified the “rumormongers” and already punished four with detainment. Thirteen more were given disciplinary talks, The Epoch Times reported.
The run on the Bank of Huludao is not the only one to have spooked Chinese authorities in the past year.
Since late 2019, bank runs have steadily increased inside the communist powerhouse’s borders. In late October and early November, respectively, Yichuan Rural Commercial Bank and Yingkou Coastal Bank both experienced bank runs after fears of bad management boiled over, according to Reuters.
Authorities blamed the mass withdrawals on rumors spread online.
Beginning this year, however, with coronavirus aftershocks rocking economies across the world, China started experiencing even more bank runs.
First, the Gansu Bank was flooded with worried customers in April.
A few months later, the Bank of Baoding saw depositors rush the building, demanding their money back. Soon after, Yangquan City Commercial Bank experienced its own bank run.
In July, Hengshui Bank was hit with throngs of nervous customers demanding withdrawals.
Arrests followed many of the bank runs, with communist authorities again blaming rumors and lies for the wave of panic. Of course, the crumbling state of China’s financial system has been years in the making, and the country’s leadership has nobody to blame but themselves.
Several banks have been bailed out by the central government in the past two years, hinting that even the upper echelons of the Chinese Communist Party are aware of the sputtering economy.
In 2019 alone, two Chinese banks were partially bailed out, and another was completely taken over by the government, according to the Financial Times.
As China wades through a global economy transformed by pandemic and strife, it’s clear that the Middle Kingdom is on some shaky ground when it comes to overseeing a functioning economy.
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