Editorial | Resolution of bank and property crises a priority for Beijing
- Both issues are seen as threatening stability and the real economy, and come ahead of the 20th Communist Party national congress later this year
Central government officials have repeatedly reminded local cadres to ensure social and political stability ahead of the 20th Communist Party national congress later this year. No doubt they had the containment of Covid-19 in mind.
But it is a local bank scandal, or the failure of indebted property developers to deliver homes to buyers, which could pose the greater risk.
Threats to the stability of the real economy prompted the banking regulator, the China Banking and Insurance Regulatory Commission (CBIRC), to vow to address both issues, by handling risks and ensuring finance for homes delivery.
More than 1,000 savers have taken to the streets of Zhengzhou, capital of Henan province, to protest against the freezing of their deposits in five small banks since April.
About 40 billion yuan (HK$46.5 billion) belonging to depositors around the country is missing. Henan police say a criminal gang has controlled four banks in the province since 2011.
04:47
Victims of one of China’s worst financial scandals attacked by unidentified men in white at protest
What sets this scandal apart is that it does not involve an investment product entailing a degree of risk. It is about the security of deposits in banks approved for deposit-taking by the regulator.
