Chinese banks refuse to give money to people, tanks crash, clashes between police and people are going on in China
NEW DELHI: China’s economy has reached a point where it can collapse at any time. The state of China’s banking system is pathetic to the extent that,
The government has had to put tanks on the roads to protect the Bank of China branch in Henan province. The bank has refused to return people’s money. Because of this, there has been a clash between the police and the people for the last several weeks.
“Tanks are being put on the streets of #China to protect the banks. Because the Henan branch of bank of China declared that people’s savings in their branch are now investment products and can’t be withdrawn” – @MarketingMaverick#Chinabanks #chinaeconomy#ChinaExposed pic.twitter.com/URfGUKYNT0
— Abinay Reddy (@abinay_pesaru) July 21, 2022
Several small banks in China’s Henan province with combined assets of $6 billion (40 billion yuan) and about 400,000 customers defaulted in April. The main reason for this is mismanagement, corruption, weak regulation and bad risk management. There are about 4,000 small and medium banks in China and their situation is likely to be similar to that of banks in Henan province.
In China since 2009, the strategy of growth on the basis of loans is being implemented. Due to this, today China’s banking sector has reached a debt-GDP ratio of 264%. In the last 2 years, due to Covid, China’s growth has slowed down a lot.