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This article is missing information about process of the protests. Please expand the article to include this information. Further details may exist on the talk page.(July 2022)
2022 Henan banks protests were a series of demonstrations against four regional banks of Henan province, including Yuzhou Xinminsheng Village Bank[a], Shangcai Huimin County Bank[b], Zhecheng Huanghuai Community Bank[c] and New Oriental Country Bank of Kaifeng[d],[1] over alleged financial corruption.[2] Deposits totaling around 40 billion yuan[3] at these four banks in Henan, as well as at Guzhen Xinhuaihe Village Bank[e] in the neighboring Anhui province, have been affected.[1] Over the course of the several months, depositors held multiple protests in the city of Zhengzhou, which serves as the capital of the province of Henan.[4]
As of 2022, there are over 1,600 rural banks in China, located in 31 provinces, accounting for about 36% of the total number of banking financial institutions in the country.[5][6] According to the statistics of the People's Bank of China, as of the second quarter of 2021, a total of 122 rural banks were high-risk institutions, occupying about 29% of all high-risk institutions.[5]
Village banks are relatively small and lack specialized regulation, resulting in higher risk and frequent violations such as money laundering and false disclosures. Their loan default rates are higher than other banks. To attract deposits, some village banks offer high returns and use third-party platforms that do not actually deposit funds into the bank, increasing risks of fund misappropriation.[7]
Between 2011 and 2016, Xuchang Weidu Rural Commercial Bank[f] (now Xuchang Rural Commercial Bank) established several village banks, including Yuzhou Xinminsheng Village Bank[g], Shangcai Huimin County Bank[h], Zhecheng Huanghuai Community Bank[i] and New Oriental Country Bank of Kaifeng[j]. These banks sold deposit products through internet platforms such as Du Xiaoman[k], JD Finance[l], and Binhai Guojin[m], attracting many customers from provinces outside Henan, including Guangdong, Jiangsu, and Shandong. Their annual returns were around 4.6%, exceeding those offered by the "Big Four" state-owned Chinese banks during the same period.[8] Besides attracting deposits through online channels, they sometimes also provide subsidies or monetary rewards face-to-face to avoid regulations.[9]
Early indications
On 7 August 2018, the Xuchang China Banking and Insurance Regulatory Commission (Xuchang CBIRC) issued a warning to Xuchang Rural Commercial Bank and fined it 200,000 yuan. The penalty was due to the bank's failure to properly implement the responsibilities and obligations of its governance entities. Twenty days later, Xuchang CBIRC imposed another administrative penalty on the bank, this time fining it 300,000 yuan for concealing the actual use of funds through interbank business and conducting interbank transactions in violation of regulations.[10]
As early as 14-15 July 2020, Zhu, a resident of Xiangfu district, Kaifeng, spread related information regarding New Oriental Country Bank of Kaifeng in a WeChat group, causing a bank run. Zhu was subsequently detained by the local police. In response, Wang Yantao[n], Chinese Communist Party Deputy Committee Secretary of Xiangfu and district mayor, stated that[11]
New Oriental Country Bank of Kaifeng is a legitimate financial institution, and it is an insured unit under the People’s Bank of China’s deposit insurance. The rights and interests of depositors are fully protected by national laws... We urge the depositors to rest assured that everyone’s deposits at New Oriental Country Bank of Kaifeng are safe, and you can deposit and withdraw funds freely.
In March 2022, Sun Zhenfu, the main stockholder of the banks, was arrested by the government for "serious financial crimes",[12][13] and an investigation by the CBIRC wrote that a private investment company collaborated with the banks to illicitly attract public funds via online platforms.[14]
History
Frozen accounts
In April 2022, four rural banks in the Henan province stopped allowing customers to withdraw cash because "the banks were upgrading their systems".[15] Thousands were denied access to their accounts, triggering a bank run as customers of the four banks attempted to withdraw their funds en-masse.[16][17] The frozen accounts are estimated to worth 40 billion yuan, affecting 400,000 people.[18]
On 23 May, a large-scale protest was held outside the Henan China Banking and Insurance Regulatory Commission (Henan CBIRC). Thousands of protesters gathered, holding signs that read "Return Our Savings," demanding that the authorities ensure hundreds of billions of yuan are smoothly returned to depositors.[17][14] Local police later dispersed the crowd.[17] A video clip shows Yang Huajun[o], Deputy Director of the Henan CBIRC, arriving on site and using a loudspeaker to assure the public that as long as the funds are deposited legally and in compliance with regulations, they will be protected by law—provided that the public is unaware and has not participated in any illegal activities.[19]
The South China Morning Post and BBC reported fears that by June the Health Code system was being abused.[20][17] Authorities could allegedly assign a red code to potential protesters to prevented them from traveling. Following widespread public attention to the issue, several depositors responded that their health codes switched back to green on 14 June.[21] However, subsequent reports indicated that some code reverted to red shortly afterward.[22]
On 27 June, dozens of protestors gathered outside Henan CBIRC. As the crowd grew, Zhengzhou police arrived to disperse the crowd, surrounding them and forcibly boarding them onto buses. On 28 June, another dozens of protestors gathered in Zhengzhou, chanting for the banks to return their savings.[23][24]
10 July
Protestors and police in front of the Zhengzhou central branch of People's Bank of China
On July 10 at 4 am, thousands of protestors started gathering in front of the Zhengzhou central branch of People's Bank of China. They gathered before dawn to avoid government interception. By 5 am, a large crowd had already gathered, including elderly, children, pregnant women and disabled individuals.[4][25][26] They occupied the entrance steps, shouting slogans and holding banners, demanding the return of their deposits.[4]
Around 8 am, police blocked the street.[27] At 9:40 am, Qin Hanfeng[p], director of the Henan CBIRC, and deputy director Yang Huajun assured depositors their legal funds would be protected. Li Gang[q], director of the Henan Public Complaints and Proposals Administration[r], urged them not to gather illegally and advised them to submit demands online. However, because of the distrust towards the local government, officials' attempts ultimately failed.[26]
Protesters carried banners explicitly targeting the Henan Provincial People's Government, accusing it of collusion with criminal organizations and the violent suppression of citizens. Messages included "Oppose the abuse of power, oppose the Henan provincial government colluding with the mob to violently assault depositors"[s], "Oppose the corruption and violence of the Henan government — 400,000 depositors' Chinese Dream was shattered in Henan"[t], and one written in English "Against the corruption and violence of the Henan government". Other banners criticized Party Secretary of HenanLou Yangsheng. Some read "Oppose Secretary Lou Yangsheng’s deceptive three-zero policy: zero petitions, zero incidents, zero cases"[u], "Does having connections allow Lou Yangsheng to set up admonishment centers[v], no-petition villages[w], and assign red health codes?"[x] Other framed their protest in broader terms of human rights, justice, and the rule of law, declaring: "No deposits, no human rights"[y], "Oppose the oppression by the Henan government — we want justice, we want rule of law"[z].[28][4]
In a symbolic gesture, protesters held up large portraits of the late Chinese leader Mao Zedong and waved the national flag of the People's Republic of China. A giant portrait of Mao was affixed to a pillar at the entrance of the Zhengzhou central branch of the People's Bank of China. According to CNN, using the national flag to display patriotism is a common tactic among mainland Chinese protesters. Given the strict suppression of dissent in the country, this strategy signals that their grievances are aimed solely at local governments, while demonstrating loyalty to and reliance on the central government to seek justice.[4]Radio France Internationale noted that in China, a country that places great importance on maintaining social stability, public demonstrations are rare. Furthermore, police generally exhibit higher tolerance toward economic and financial protests compared to political demonstrations.[29]
Police announced from a vehicle equipped with loudspeakers that the gathering was illegal and warned the protesters that if they did not disperse, they would be detained and fined. Groups of security officers wearing plain T-shirts were standing beside the police.[27] The standoff lasted several hours until around 11 a.m., when security officers suddenly rushed up the steps and engaged in physical clashes with the protesters.[27] In response, the protesters threw bottles and other small objects at them.[4] Eyewitnesses and social media videos showed the scene quickly descending into chaos.[4] The security officers dragged protesters down the steps and beat those resisting, including women and the elderly. Police officers on-site made no effort to intervene. Some people were beaten until their faces were bleeding, and a disabled person was reportedly beaten into unconsciousness.[30] Many were shocked by the violence.[4]
Many protesters were forcibly taken onto buses and transported to various detention sites, including schools, hotels, factories and village committees.[4] They were required to register their information and sign guarantees promising not to gather again.[27] Some protestors said they were escorted by assigned personnel to the train station and forced to leave by train.[31] Additionally, some were detained by Zhengzhou police and became unreachable.[8]
Resolution
On July 12, the CBIRC announced it would start reimbursing account holders, with deposits of up to 50,000 yuan ($7,400) being the first to be returned.[32][17]
Afterwards, the amount of compensation for the number of deposits are gradually increasing:
up to 500,000 yuan, on August 30. And if it exceeds 500,000 yuan, compensation will be made according to the amount of 500,000, and the right to compensate beyond 500,000 yuan is reserved until the bank assets involved in this incident are properly disposed of.[38][39] The amount of 500,000 yuan is the maximum compensation amount for deposit insurance.
On January 9, 2023, it was reported that the bank involved began to make an appointment to register depositors with more than 500,000 yuan.[40].
Effect to wider economy
The Henan bank crisis is contributing to growing volatility in the Chinese financial system. Since at least 2022, there has been an increasing number of defaulted property loans recorded on the books of smaller, regional lenders. The Australian Financial Review reported that the Chinese government does not seem to have a satisfactory solution to the financial and property sector crisis.[41]
Misinformation
A video circulated on social media which claimed that the People's Liberation Army deployed tanks to defend the banks from the protesters. An Associated Press fact check found that the footage was from a routine training exercise in Shandong, more than 400 kilometers away.[42]
↑ Petitioning (上訪) is usually the only way for Chinese civilians get justice, if their legal rights are not protect. They often petition by traveling to Beijing and presenting their case to a higher level governor from the central government. No-petition village (無訪村) refers to blocking all petitions in that village.
↑ 北京商报金融调查小组 (2022-06-19). 财经新闻中心 (ed.). "河南村镇银行存款"失踪"背后"[Behind the Disappearance of the Henan Village Bank Deposits]. 北京商报 (in Simplified Chinese). doi:10.28036/n.cnki.nbjxd.2022.001049. Archived from the original on 2022-07-15. Retrieved 2022-07-15.
↑ 朱远祥; 曾毅伟 (2022-05-19). 崔烜 (ed.). "多地村镇银行线上取款难背后: 发起行高管被通缉, 有企业涉嫌非吸"[Behind the difficulties in online withdrawals at rural banks in multiple regions: Executives of founding banks are wanted, some companies suspected of illegal fundraising] (in Simplified Chinese). The Paper. Archived from the original on 2022-06-22. Retrieved 2022-07-10.
↑ 段彦超 (2020-07-16). 崔烜 (ed.). "居民散布银行不实消息引发集中取款，开封祥符区长视频辟谣"[Residents spread false bank rumors, triggering mass withdrawals; Xiangfu District chief in Kaifeng issues video denial]. The Paper (in Simplified Chinese). Archived from the original on 2022-07-05. Retrieved 2022-07-06.
↑ 陳進安. "河南4村鎮銀行提現難涉數百億 大批民眾鄭州抗議要求討回存款"[Withdrawal difficulties at four rural banks in Henan involve hundreds of billions; large crowds protest in Zhengzhou demanding return of deposits]. HK01 (in Chinese (Hong Kong)). Archived from the original on 2022-06-14. Retrieved 2022-06-14.
↑ 张晓云. "【追踪】河南村镇银行储户莫名被赋红码后续：码已变绿"[Follow-up | Health codes turned green after Henan rural bank depositors were inexplicably assigned red codes]. Jiemian News (in Simplified Chinese). Archived from the original on 2022-06-14. Retrieved 2022-06-14.
↑ 廖艳; 薛莎莎 (2022-06-14). 崔烜 (ed.). "多名储户去河南村镇银行讨存款疑遭赋红码，有人反映变绿码后又返红"[Multiple depositors seeking to withdraw funds from Henan village banks were reportedly assigned red health codes; some say the codes turned green and then back to red]. The Paper (in Simplified Chinese). Archived from the original on 2022-06-27. Retrieved 2022-06-18. 过了一会儿，刘女士再次向澎湃新闻发来信息称，她的健康码又变红了。相关截图显示，6月14日14时22分，其"豫康码"为红码，底部文字为"您不符合疫情防控的通行条件，请做好自身防护工作，符合当地政策后将展示新码"。[After a while, Ms. Liu sent another message to The Paper, saying that her health code had turned red again. A related screenshot shows that at 2:22 p.m. on June 14, her health code was red, with a message at the bottom stating: "You do not meet the travel requirements for epidemic prevention and control. Please take proper personal protective measures. A new code will be displayed once you meet local policies.]
1 2 秋之 (2022-07-21). 居敬一 (ed.). "河南村镇银行抗议储户："政府殴打手无寸铁的老百姓，完全颠覆了我的认知""[Henan village bank protester: The government beating unarmed civilians completely shattered my understanding]. NGOCN (in Chinese (China)). Archived from the original on 2022-07-27. Retrieved 2022-07-30.
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