Major Banking Crisis in China, Rights Protests Abound, Widespread Resistance

Summary

Recent turmoil in China's banking industry, highlighted by the collapse of Ji Bank, has sparked widespread protests and raised concerns about financial stability. Videos show large crowds demanding their money back, as rumors of closures spread. Despite authorities' denials, issues persist with depositors unable to access funds, exacerbated by corruption and economic downturns. The situation reflects broader economic challenges, with major banks cutting salaries and undergoing restructurings. The crisis underscores vulnerabilities in China's banking sector, posing risks to social stability and the broader economy.

Takeaways

• 📢 Victims of bank failures in China are protesting for justice, gathering at the Shanghai Public Security Bureau.
• 🏦 The banking industry in China, once considered stable, is experiencing unprecedented turmoil.
• 📅 On July 6, Ji Bank officially collapsed, despite earlier denials of closure rumors, causing depositors to gather at the bank entrance.
• 📉 The collapse of real estate and banks is signaling a significant financial crisis in China.
• 🚔 Authorities dispatched police to make arrests as depositors demanded their money back, while the bank claimed normal operations.
• 💼 Internal corruption within Ji Bank has been a contributing factor, with multiple high-ranking officials dismissed for serious violations.
• 🏢 The closure of the Changchun branch of the Agricultural Bank of China on July 4 raised further concerns about the stability of state-owned banks.
• 💸 Major state-owned banks in China are implementing large-scale salary cuts and layoffs, affecting both employees and executives.
• 🔄 Over 80 small and medium-sized banks in China have undergone mergers and restructuring in the first half of the year alone.
• ⏳ A financial analyst warned that China's banking sector is on the edge of a dangerous cliff, with the real estate crisis exacerbating the situation.

Q & A

What recent event caused turmoil in China's banking industry?

The collapse of Ji Bank on July 6, 2024, led to widespread turmoil in China's banking industry.

How did the public react to the collapse of Ji Bank?

The public reacted by gathering at the bank entrance to defend their legal rights and demand their money back.

What was the initial response of Ji Bank to the rumors of its closure?

Ji Bank initially denied the rumors of its closure, claiming normal operations.

What broader economic issues are contributing to the crisis in China's banking sector?

The collapse of real estate giants like Evergrande and widespread defaults in the private financing sector are significant contributors to the crisis.

What role does internal corruption play in Ji Bank's crisis?

Internal corruption at Ji Bank, including the dismissal of multiple high-ranking officials for serious violations, has significantly contributed to its crisis.

What impact has the banking crisis had on the employees of Pingan Bank?

Pingan Bank employees are experiencing massive layoffs, relocation demands, and salary cuts as part of the bank's cost-cutting measures.

How are state-owned banks like China Construction Bank responding to financial pressures?

State-owned banks like China Construction Bank are implementing large-scale salary cuts and demanding employees return bonuses.

What challenges are small and medium-sized banks in China facing?

Small and medium-sized banks in China are undergoing mergers and restructuring, with many struggling due to poor management and high levels of non-performing loans.

What are the potential social implications of the banking crisis in China?

The banking crisis could threaten social stability, especially if depositors, many of whom are middle class or elderly, lose their savings.

How are Western financial institutions being affected by China's economic slowdown?

Western financial institutions are also impacted, with significant layoffs in their China divisions and some exiting banking operations in certain provinces.

Outlines

00:00

📉 Unrest and Bank Collapses in China

Recent protests by victims of bank collapses in China, notably outside the Shanghai Public Security Bureau, highlight ongoing unrest. The banking industry, previously seen as stable, faces unprecedented turmoil. On July 6, Ji Bank officially collapsed despite prior denials, leading depositors to protest. The crisis links to the collapse of real estate giants like Evergrande. Authorities attempt to downplay the issues, but public discontent grows, fueled by the inability to withdraw deposits and accusations of corruption and mismanagement within banks like Ji Bank.

05:00

🔍 Further Bank Troubles and Government Response

On July 4, the Agricultural Bank of China’s Changchun branch closed, sparking protests. Reports of salary cuts and layoffs at major banks, including Ping An and China Construction Bank, indicate wider industry issues. Despite claims of normal operations, widespread salary reductions and forced relocations suggest financial instability. The CCP's efforts to maintain control include punishing those spreading 'false' information and implementing salary caps to promote 'shared prosperity,' further affecting employee morale and trust in state-owned enterprises.

10:02

📊 Mergers and Structural Changes in Smaller Banks

Small and medium-sized banks face large-scale restructuring, with over 80 banks merging or being restructured in the first half of the year. The rapid pace of mergers raises concerns about the viability of these banks. Reports highlight poor management and high non-performing loan ratios, exacerbated by the real estate crisis. Critics argue that merging bad banks creates larger, more problematic institutions. The Chinese government's response to these issues, including arrests and misinformation campaigns, further destabilizes public trust.

15:03

⚠️ Broader Economic Concerns and Global Impact

China’s banking crisis mirrors broader economic issues, with both real estate and banking sectors in turmoil. The collapse of real estate giants affects banks heavily involved in mortgage and developer loans. Economic slowdown reduces corporate loan demand, worsening the cycle of financial instability. Western financial institutions also suffer from China's economic downturn, leading to significant layoffs. Analysts express deep concerns about the potential for a financial meltdown, exacerbated by the CCP’s handling of the crisis and the broader impact on global markets.

Keywords

💡Ji Bank

Ji Bank is a key institution in the video, representing the first provincial corporate bank in Ji Province, previously known as Nanchang City Commercial Bank. The collapse of Ji Bank is central to the video's theme, as it highlights the broader financial turmoil and the domino effect within China's banking sector. The bank's troubles, exacerbated by ties to failing real estate entities like Evergrande, underscore the instability in the financial system.

💡Protests

Protests are a significant recurring event in the video, with victims gathering at various locations such as the Shanghai Public Security Bureau and Ji Bank to demand justice and the return of their money. These protests illustrate the public's frustration and desperation in response to the financial crisis, and they emphasize the breakdown of trust between the citizens and financial institutions.

💡Banking Crisis

The banking crisis is a central theme in the video, referring to the widespread instability and collapse of banks in China. The crisis, triggered by the collapse of real estate giants and internal corruption, is causing panic among depositors and threatens the overall financial stability of the country. Specific examples include Ji Bank's collapse and the problems at the Agricultural Bank of China and Pingan Bank.

💡Evergrande

Evergrande is a major real estate developer in China whose collapse has had a significant ripple effect on the financial industry, particularly on banks like Ji Bank. The company's financial troubles are highlighted as a primary factor dragging down other institutions and contributing to the broader banking crisis. This connection underscores the interconnectedness of the real estate and banking sectors.

💡Depositors

Depositors are individuals who have placed their savings in banks and are now facing difficulties withdrawing their funds due to the banking crisis. The video highlights their plight, including protests and demands for their money back, showcasing the human impact of the financial turmoil and the erosion of public trust in financial institutions.

💡Chinese Communist Party (CCP)

The Chinese Communist Party (CCP) is portrayed as the governing authority struggling to manage the banking crisis. The video mentions the CCP's attempts to refute rumors and maintain public order, but also points out the criticism it faces for poor supervision and shifting blame. The CCP's actions and responses are crucial in understanding the political context of the financial instability.

💡Real Estate Collapse

The real estate collapse refers to the significant decline in China's property market, which has heavily impacted banks and other financial institutions. This collapse is depicted as a catalyst for the banking crisis, with many banks having extended loans to struggling real estate developers. The video uses Evergrande as a key example of this collapse and its consequences.

💡Corruption

Corruption within banks like Ji Bank is highlighted as a contributing factor to the financial crisis. The video mentions the dismissal and investigation of high-ranking officials for serious violations of discipline and law. This internal corruption exacerbates the banks' financial troubles and undermines their credibility and operational integrity.

💡Salary Cuts and Layoffs

Salary cuts and layoffs are measures taken by banks like Pingan Bank and China Construction Bank to reduce costs amid the financial crisis. The video discusses the impact of these actions on employees, including performance bonus reductions and forced relocations. These measures illustrate the severity of the crisis and the widespread effects on both financial institutions and their staff.

💡Economic Downturn

The economic downturn refers to the broader decline in China's economy, characterized by reduced consumer spending and corporate loan demand. The video links this downturn to the banking crisis, showing how slowing growth exacerbates financial instability. It highlights the vicious cycle where economic troubles lead to tighter credit, further stifling recovery efforts.

Highlights

Victims of Hyen have continued to protest, gathering at the Shanghai Public Security Bureau to seek justice.

The banking industry, once considered stable, is now experiencing unprecedented turmoil signaling a wave of collapse.

On July 6, a video posted on X showed a large crowd of Chinese citizens gathering outside Ji Bang Bank protesting loudly.

The head office of Ji Bank denied rumors of closure, but on July 6, Ji Bank officially collapsed.

Depositors gathered at the bank entrance to defend their legal rights, with one person commenting 'the domino effect has begun.'

Authorities dispatched police to make arrests as victims demanded their money back while the bank claimed to be operating normally.

The rumored collapse of Ji Bang, dragged down by Evergrande, can no longer be hidden, causing significant shock waves in China's financial industry.

The local Financial Supervision Bureau of Nanchang City issued a notice refuting rumors and threatening severe punishment for those involved in spreading false information.

Despite official denials, news of Ji Bank's closure emerged, proving the rumors accurate and signaling deep issues in the banking sector.

China's economy has been on a downward trend with consumers becoming more reserved with their spending.

Ji Bank, established in December 2015, faced a crisis exacerbated by the collapse of the Nanchang Private Financing Registration Service Center.

Internal corruption within Ji Bank is alarming, with multiple high-ranking officials dismissed in recent years.

If Ji Bank's case is considered a local crisis, the collapse of a state-owned bank would completely shatter people's confidence in state-owned banks.

On July 4th, the Changchun branch of the Agricultural Bank of China closed, leading many people to gather at the bank entrance to seek justice.

Pingan Bank is reportedly undergoing massive layoffs, affecting over 100 employees and causing a significant stir in financial circles.

China Construction Bank implemented large-scale salary cuts, causing a strong reaction throughout the banking industry.

Reports indicate that over 80 small and medium-sized banks have undergone mergers and restructuring in the first half of the year alone.

The People's Bank of China report indicates 337 high-risk banks with total assets of 6.63 trillion yen, primarily small and medium-sized banks.

There are concerns that the collapse of poorly performing small banks could directly threaten social stability.

The broader economic downturn in China has led to the emergence of professional debtors, forming an industry chain with black market intermediaries.

Western financial institutions are also affected by China's economic slowdown, leading to significant layoffs in their China divisions.

Transcripts

victims of hyen have continued to

protest recently gathering at the

Shanghai public Security Bureau to seek

Justice the issue remains unresolved and

the banking industry once considered

stable is now experiencing unprecedented

turmoil signaling a wave of collapse on

July 6 a video posted on X showed a

large crowd of Chinese citizens

Gathering outside ji bang protesting

loudly the post stated the head office

of ji Bank Bank denied Rumors in

relation to closure 2 days ago but today

July 6th ji bank has officially

collapsed depositors gathered at the

bank entrance to defend their legal

rights one person commented the domino

effect has begun the collapse of real

estate and Banks is starting the Chinese

Communist Party can no longer Salvage

the situation and is

self-destructing as early as June 29th a

video posted on X showed a large crowd

gathered outside ji

Bank shouting desperately return our

money return our money authorities

dispatch police to make arrests the post

noted victims demand their money back

while the bank claims to be having

normal operations the rumored collapse

of Jay bang dragged down by evergr can

no longer be hidden the financial storm

triggered by the successive collapses of

Chinese real estate Giants is causing

significant shock waves in China's

financial industry potentially leading

to a major collapse in the banking

sector jangi Bank staff claimed that on

June 29th they gradually restored normal

withdrawal functions for users and

emphasized that all deposit and

withdrawal operations were normal

however it seems that some people are

still unable to withdraw their own money

on July 4th the local Financial

supervision Bureau of Nanchang City in

jangi Province issued a notice refuting

rumors stating that

a small number of people gathered at the

head office of jangi bank and posted

false information online suspected of

disrupting the order of financial

institutions they also threatened that

those involved will be severely punished

by law the Chinese government proceeded

to block news of the jangi bank collapse

but the public did not buy it and went

on criticizing officials whenever a

problem arises they immediately try to

distance themselves from it what do you

mean by false information why don't they

mention the reason why people gathered

up they only call it a rumor without

explaining the cause some other comments

read not explaining the situation but

already assigning blame or poor

supervision but excellent at

blaming however just two days after the

CCP officials refuted the rumors news of

ji bank's closure emerged proving the

so-called rumors to be accurate China's

economy has been on a downward Trend in

recent years

with consumers becoming more reserved

with their spending people have been

depositing their hard-earned money into

financial institutions fearing a future

without money however incidents of

people being unable to withdraw their

deposits have persisted causing

Widespread Panic public records show

that ji Bank was established in December

2015 as the first provincial corporate

bank in ji Province previously known as

Nanchang City Commercial Bank founded in

February 199 8 annual reports indicate

that the top 10 shareholders of ji Bank

are mainly state-owned entities besides

being dragged down by ever's collapse

another reason for ji bank's crisis

according to reports from tyan

press.com involves a nchang private

financing registration service center

company referred to as mingrong Den

Center economic Observer reported on

June 1st that mingrong Den Center is

established for 9 years recently

experienced widespread default on its

recommended investment products leaving

many investors unable to recover their

funds and due interest the crisis

affected over 2,200 investors involving

tens of billions of Yen primarily local

citizens of Nanchang especially those

aged 60 to 90 and investors with 1 to2

million yen the center's operations have

since been

suspended however ever Nan Chang's local

Financial supervision Bureau officials

claim that ji bang has no relationship

with Mong Den Center other than being

its account opening Bank additionally

internal corruption within ji bank is

alarming in recent years multiple high

ranking officials have been dismissed

including former chairman Chen sha Ming

former deputy president and board

secretary shuji Hong along with Party

Committee Member and Deputy president

yugen

who is currently under investigation for

serious violations of discipline and law

coupled with the bank's annual decline

in net profit its profitability is

increasingly questioned which may also

be a significant cause of the crisis if

johi bank's case is considered a local

crisis then the collapse of a

state-owned bank would completely

shatter people's confidence in

state-owned banks on July 4th the Chang

Chun branch of the Agricultural Bank of

China closed with many people gathering

at the bank entrance to seek Justice a

video uploaded by a citizen stated such

a large Bank closed its doors just like

that this is a head office of the

Agricultural Bank of China in Chong Chun

and it has closed the agricultural Bank

of China is one of China's four major

state-owned Banks if a branch can

collapse doesn't mean this is the only

problematic branch Bank closures

undoubtedly make ordinary depositors the

biggest victim

but news of large scale pay cuts or

layoffs at Banks continues to emerge

indicating that employees are also

suffering and these Banks May each be a

financial Time Bomb waiting to explode

pingan Bank known as a rising star in

China's banking sector is reportedly

undergoing massive layoffs as of July

6th causing a significant stir in

financial circles to cut costs pingan

bank is transferring over 100 employees

from its Shanghai office to its

headquarters in Shenzhen this move

affects departments such as credit cards

Consumer Finance and financial markets

employees unwilling to relocate are

being offered Severance packages which

many view as disguised layoffs insiders

revealed that the relocation process is

on a tight schedule with all necessary

procedures to be completed within just

over a month however differences in

subsidy policies between Shanghai and

Shenzhen have caused concern among

employees for those with mortgages in

Shanghai moving to Shenzhen means not

only bearing the rental cost there but

also potentially facing a situation

where their income may not be able to

cover the additional expenses as a

result some may choose to resign leading

to what is being called a relocation

style layoff in early May pingon Bank

announced a salary cut for all employees

several employees reported to the media

that their performance bonuses for that

month have been significantly reduced

ranging from 10% cuts to complete

elimination affecting a wide range of

dep departments additionally China

construction bank one of China's four

major Banks has implemented large-scale

salary Cuts causing a strong reaction

throughout the banking industry on July

1st Reuters quoted two insiders stating

that China construction Bank the

country's second largest state-owned

bank had reduced salaries for staff at

its headquarters by at least 10%

shockingly salary cuts for executives

and most Branch staff will be even more

significant a staff member at Shenzhen

branch of China construction Bank

recently revealed to Radio free Asia

that their salaries were cut by 20% at

the end of last year quote branch in

Shenzhen zai dong Guang and other parts

of guandong saw a 20% reduction last

year and some employee benefits were

also lost sometimes we even have to work

overtime end quote a middle level

manager who has worked at China

construction bank for 15 years expressed

his distress we always thought

state-owned Enterprises were secure jobs

we never expected this to happen after

so many years of hard work is this the

outcome the South China Morning Post

reported on April 1st that the 10 major

state-owned Banks collectively slashed

salaries and demanded employees to

return nearly one 100 million UN in

bonuses Bloomberg reported on June 27th

that in response to the ccp's call for

shared Prosperity several of China's

largest state-owned financial companies

have started implementing strict salary

cap

policies sources say that several of

China's largest financial groups have

asked Executives to forgo deferred

bonuses and some fund managers have even

been asked to return salaries from

previous years to comply with a 2.9

Million un pre tax annual salary cap in

recent weeks state-owned Enterprises

such as China Merchants group China

everbrite group and cic group have

communicated these directives to their

employees according to China business

Network citing wind data platform

statistics on April 11th the average

salary reduction for Bank Management in

2023 is 133% with some senior Executives

facing Cuts as high as

40% cicc one of China's largest

investment Banks had earlier reported

significant salary cuts for employees

with basic salaries reduced by 25%

affecting over 2,000 employees last

April cicc had already cut employee

bonuses by up to 40% but such a

substantial reduction in basic salaries

was relatively rare someone commented

and said it seems no industry is spared

whether you're ordinary or extraordinary

everyone is feeling the pressure of

loans High income earners are stressed

and lwi income earners are stressed too

how do we get here not only are major

banks in trouble but the large scale

restructuring of small and medium-sized

Banks also signals unprecedented

challenges for the entire industry

reports indicate that over 80 small and

medium-sized banks have undergone

mergers and restructuring in the first

half of the Year alone shockingly within

just 7 Days of leading up to June 21st

40 rural small Banks were either abs

absorbed or dissolved notably leing

rural Commercial Bank plans to integrate

over 60 small banks in just over a year

a speed and scope rarely seen in China's

Financial history a financial analyst

exclaimed it's like playing a financial

version of the big fish eating the

little fish game but the problem is once

all the little fish are gone can the big

fish survive according to China

Financial stability report 2023 from The

People's Bank of China

there are currently

337 high-risk banks in China with total

assets of 6.63 trillion yen primarily

small and medium-sized Banks given the

typical Under reporting by the Chinese

government the actual number of

high-risk Banks is likely higher than

officially stated an article by The

Economist on July 4th noted that even

during the worst deposit loan crisis

Chinese banks have never disappeared on

such a rapid Pace the report highlight

highlighted that since 2019 several

medium-sized banks in China have

collapsed but the most complex and

problematic are rural small Banks China

has about 3,800 such rural Banks holding

55 trillion yen in assets which account

for 13% of the banking system these

banks have long suffered from poor

management and a large accumulation of

bad loans many have extended loans to

real estate developers and local

governments making them vulnerable to

the real estate crisis

in recent years some banks revealed that

up to 40% of their loans are

non-performing critics argue that

merging dozens of bad banks will only

create larger worse Banks the greatest

concern for the CCP authorities is that

the collapse of poorly performing small

Banks could directly threaten social

stability in 2022 the massive fraud at

Hunan Village in Township Bank led to

depositors to protest on the streets

authorities responded by dispatching

police to maintain order and arrest the

protesters this incident remains

unresolved public concern centers on

whether depositors savings will be used

to cover bad loans or corruption losses

during the bank mergers most depositors

are middle class or elderly individuals

who rely on their savings for retirement

and to support their children and

grandchildren these people benefited

from the ccp's reform and opening up and

are its staunch supporters if their

savings disappear they in their families

will face a survival crisis likely

sparking a strong wave of resistance a

banking Insider revealed that the actual

situation might be worse than official

data suggests with some banks

non-performing loan ratios exceeding 40%

hidden through various means this is

like a ticking time bomb that could

trigger a financial system meltdown at

any

moment for example someone recently

revealed on X how Banks hide bad debts

in the best performing branch of China

construction Bank in Hunan employees are

pressured to meet targets by using their

own money to buy deposits or loans at

the end of each

quarter this time at the end of June

employees were even asked to pay off

overdue loans for customers each branch

was given several thousand un for this

task which was framed as a quote

political Mission end quote despite

finding it absurd and a violation of

employee rights most branches complied

due to Relentless pressure from the

Departments and leaders after completing

the task another batch of similar tasks

was issued some employees who couldn't

afford it resorted to using credit card

loans to pay this distorted practice

highlights how banks have become

increasingly dysfunctional and

exploitative the broader economic

downturn in China has led to the

emergence of professional debtors

forming an industry chain black market

intermediaries collude with bank

insiders to help debtors obtain large

loans fraudulently which are then cashed

out and split among them these debtors

stop repaying become debt beats and

exacerbating the already severe issue of

bad loans in Banks China's banking

crisis acts like a mirror reflecting

various economic problems from local

small Banks to National Giants and from

ordinary depositors to Elite Executives

everyone is struggling to survive the

storm a financial analyst on the YouTube

channel cold ey noted that real estate

and banking are China's two main pillars

the rapid collapse of the real estate

sector which also has Financial

attributes suggests that many loans are

secured against Real Estate as property

values fall and unsold homes increase

these underlying assets become

problematic potentially triggering a

financial crisis many banks have been

dragged down by real estate particularly

mortgage and developer loans and some in

M products this indicates that China's

banking sector is on the edge of a

dangerous Cliff mirroring the broader

economic difficulties the bursting of

the real estate bubble has plunged many

developers into severe debt crises

heavily impacting Banks their main

creditors at the same time slowing

economic growth has reduced corporate

loan demand further squeezing Bank

profits this vicious cycle seems to be

worsening with banks en tightening

credit to control risks which in turn

stifle economic activity an economists

Express deep concern it's like a vicious

cycle without credit the economy can't

recover but if the economy doesn't

recover Banks won't lend it's like we're

walking on a tight RPP and any misstep

could send us plunging into an abyss

Western financial institutions are also

affected by China's economic slowdown

and declining Capital Market activities

leading to significant layoffs in the

China divisions Morgan Stanley recently

announced its exit from banking

operations in Shandon Province including

cha and ginan cities due to

deteriorating non-performing loans

China's economy appears to be in a dire

predicament

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