A depositors’ rights movement triggered by the collapse of several rural banks in China’s Henan Province has been simmering for a while and shows no signs of abating.
The local government first tried to prevent angry depositors from congregating by using the pretext of “pandemic prevention” and imposing restrictions on individual depositors through their mandatory COVID-19 smartphone apps. When that failed, the authorities started sending thugs wearing white shirts to beat up the depositors — including elderly people and pregnant women — causing bloody injuries in several cases, while the police stood by and did nothing. It resembled the 2019 Yuen Long attack on Hong Kong democracy advocates.
Besides using violence to threaten depositors, many of whom had lost their life savings, the authorities also tricked them into signing declarations that they would drop their claims in exchange for an “advance payment” of 50,000 yuan (US$7,389).
These incidents demonstrate China’s uncivilized ways to “solve problems” and expose the extent of government corruption. They also reveal emerging problems in China’s economy.
Rural bank failures might be just a prelude to the coming collapse of China, the bursting of its economic bubble.
China’s numbers-oriented economic policies, as well as its serious problems of corruption and ineffective regulation, made real estate the easiest option for fraudulent accounting, and collusion between government entities and businesses in pursuit of profit. Property developers used high-leverage and high-turnover loans to set up a large number of construction projects. Huge sums of hot money blindly poured into the property market, driving up housing prices and creating the illusion of a prosperous urban China posting impressive economic figures. While spurring the development of related industries, it also caused a real-estate glut.
Speaking at the Chinese Communist Party’s 19th National Congress in October 2017, Chinese President Xi Jinping (習近平) said: “We must not forget that housing is for living in, not for speculation.”
The Chinese government then adopted a policy of suppressing property prices, but its measures went too far and caused many property developers to close or default. It dealt a heavy blow to the housing market and triggered a chain reaction of bad bank loans. Consequently, the government was forced to relax the restrictions, and even came up with a ridiculous policy of “interviewing” wealthy property owners who “maliciously refused to sell their properties.”
However, political issues such as China’s iron-fisted COVID-19 containment policies, its human rights issues and its pro-Russian stance, as well as rising operating costs, have prompted many investors to leave the country. This has pushed up the unemployment rate.
Under such circumstances, there is little interest in buying real estate, causing the country’s worrisome property vacancy rate to reach new highs and starting to cause ruptures in financial supply chains.
The problem of unfinished buildings has continued to spread, starting with property developer Evergrande Group. Mortgage takers who cannot stand the situation anymore have started to collectively refuse mortgage payments on unfinished homes.
This has a knock-on effect on the banking system. When China’s four largest state-owned banks announced that the risk posed by bad debts is “controllable and preventable,” it caused even greater panic.
Problems stemming from the real-estate sector are snowballing and could be the straw that breaks the camel’s back.
China’s growing economic problems, in combination with inflationary pressure and weak domestic demand, might well drag down the global economy.
With the crisis of confidence in China’s banking system potentially leading toward collapse, symptoms such as bank depositors’ protests, mortgage payment boycotts and bank runs are likely to crop up all over the country.
Any further waves of protest will probably be met with further brutal crackdowns, as well as Chinese-style countermeasures such as stripping people’s wealth and printing large amounts of money. These “solutions” would only make the problems worse.
Xi might then have to decide whether to divert attention from the political and economic storms by ordering an attack on Taiwan.
Hong Tsun-ming is a specialist in the Taiwan Statebuilding Party’s international section.
Translated by Julian Clegg
You wish every Taiwanese spoke English like I do. I was not born an anglophone, yet I am paid to write and speak in English. It is my working language and my primary idiom in private. I am more than bilingual: I think in English; it is my language now. Can you guess how many native English speakers I had as teachers in my entire life? Zero. I only lived in an English-speaking country, Australia, in my 30s, and it was because I was already fluent that I was able to live and pursue a career. English became my main language during adulthood
Somehow, US intelligence identified “the Houthis’ top missile guy” and pinpointed his exact location. At 1348 hours (Washington time), March 15, President Trump’s national security advisor Mike Waltz texted, “positive ID of him walking into his girlfriend’s building.” The unsuspecting Romeo entered. High above, the drone monitoring the building registered a flash. When the smoke cleared, Mr. Waltz texted, “…And it’s now collapsed.” RIP. The star-crossed “top missile guy” had been target number one in the now uproarious US Navy bombing campaign on that Sunday against the Yemeni rebels who have been holding the Red Sea hostage since October 19,
Taiwan on Monday celebrated Freedom of Speech Day. The commemoration is not an international day, and was first established in Tainan by President William Lai (賴清德) in 2012, when he was mayor of that city. The day was elevated to a national holiday in 2016 by then-president Tsai Ing-wen (蔡英文). Lai chose April 7, because it marks the anniversary of the death of democracy advocate Deng Nan-jung (鄭南榕), who started Freedom Era Weekly to promote freedom of expression. Thirty-six years ago, a warrant for Deng’s arrest had been issued after he refused to appear in court to answer charges of
The Opinion page has published several articles and editorials over the past few weeks addressing Taiwan’s efforts to leverage unique or strong aspects of its culture to increase international awareness of the nation. These have included submissions by foreign journalists and overseas students, highlighting how bubble milk tea, Guinness World Record attempts, the entertainment sectors, impressive scenery, world-class cuisine and important contributions to the high-tech supply chain can enhance Taiwan’s recognition overseas and therefore its soft power. That entails competing for attention in already crowded sectors. Other nations, after all, offer popular entertainment exports, beautiful scenic spots and great food.
RSS