Bank Run: there is a bank run in China and nobody talks about it
Nobody talks about it, but there is a bank run underway in China. After nearly one million Chinese were unable to access their bank deposits in Henan Province, Central China earlier this year, residents of Shanghai, East China, Shenzhen, South China, Dandong and Jiujiang, in central-eastern China, reported difficulties encountered in trying to withdraw cash from their bank accounts.
Some banks limit the number of daily customers served, others limit each customer's withdrawal to no more than 1,000 yuan (about $ 149), and still others have closed their branches. ATMs are also empty, which makes it nearly impossible in some areas
Bank runs have occurred in the world's second largest economy for over a week, which is unusual in China because most banks are state-run. the first news of problems leaked around June 12, but by now the cases are widespread and more areas.
Zheng Yongnian, one of Chinese leader Xi Jinping's economic advisers, published an essay on June 1, in which he stressed that the Chinese economy is facing critical challenges, including more than half of foreign investment has left China and the Chinese private companies are struggling for survival due to the supply chain crisis and lack of liquidity. Even the world recession at the gates, with the decline in prospective exports, does not help. Furthermore, there is still the ongoing real estate crisis in which a lot of financial resources have been invested.
The crisis has hit several cities in Shenzen, but also in the north, such as Dandong. Among the most affected institutions is the Agricultural Bank of China, to which several branches that no longer return the money belong. There are lines that can take several days to withdraw the money. Even some online banks, widely used in China, such as Alipay, have limited citizens' withdrawals. There are cases in which people who have paid large sums have seen them practically freeze for several years.
China's central bank continues to lower banks' reserve ratio, which should normally provide much more liquidity
Despite this, bank runs are multiplying. Because? Strangely, no one in the West asks this.
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The Bank Run article: there is a bank run in China and nobody talks about it comes from ScenariEconomici.it .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/bank-run-ce-una-corsa-agli-sportelli-in-cina-e-non-ne-parla-nessuno/ on Sat, 25 Jun 2022 10:44:17 +0000.