China’s banks are allegedly failing. A problem that began in Henan is mushrooming. China’s smaller rural banks are failing partly due to the economic slowdown and some unscrupulous lenders.
The smaller rural banks have played a crucial role in boosting China’s economy. But the deepening economic slowdown in the country since the middle of the last year is insufficient to provide the banking system’s required cushion.
The crisis has been brewing for years, especially in the country’s smaller, rural lenders, which have typically remained outside the regulatory spotlight. Lenders, often fueling shadow banking, have been piling up bad debts but challenges multiplied after Covid 19 pandemic hit the country’s economic growth.
China’s government got involved and made it far worse.
The government won’t replace the lost money. The money was deposited on the notion that China’s banks had insurance. Unfortunately, only deposits are covered, and the people were duped.
People who lost money tried to protest, but protests were immediately broken up. Word is getting out that no one should trust China’s banks. The word is that people should withdraw their money and keep it at home. That is very bad news for China.
The narrator in the clip below believes the banks are failing. He explains in detail.