- Title: China's year of protests and discontent hangs heavy ahead of party congress
- Date: 13th October 2022
- Summary: (SOUNDBITE) (Mandarin) RESEARCH DIRECTOR OF E-HOUSE THINK TANK, YAN YUEJIN, SAYING: "You will realise that this issue (developers not completing projects due to high debt) has spread across the country, many (home buyers) stopped payments and cut off loans. Whether it's true or not, following this increase, in the middle of July, some government departments, including the central and some local governments, took note of this matter and were inducing public opinions. At the same time, they started to evaluate the real estate market to find out how many problematic properties there were, at which real estate companies and which cities they were located in."
- Embargoed: 27th October 2022 01:12
- Keywords: COVID-19 China Xi bank congress discontent lockdown party policy property protest
- Location: ZHENGZHOU, HANGZHOU, DANZHOU, SHENZHEN, LUOYANG, SHANGHAI, GUILIN, BEIJING, CHINA / NEW HAVEN, UNITED STATES
- City: ZHENGZHOU, HANGZHOU, DANZHOU, SHENZHEN, LUOYANG, SHANGHAI, GUILIN, BEIJING, CHINA / NEW HAVEN, UNITED STATES
- Country: China
- Topics: Asia / Pacific,Government/Politics,Elections/Voting
- Reuters ID: LVA004136811102022RP1
- Aspect Ratio: 16:9
- Story Text: EDITORS PLEASE NOTE: PART AUDIO QUALITY AS INCOMING
In July, a video of a protest in China being violently broken up by plain-clothed security personnel went viral online.
A crowd of about 1,000 people rallied outside the Zhengzhou branch of the Chinese central bank, demanding answers as to why they had lost access to their savings in a banking fraud scandal that started in April. Unidentified men, mostly wearing white shirts, charged and dragged the disgruntled bank customers onto nearby buses, according to those at the scene. Online footage of the clashes was shared millions of times before the videos and related hashtags were censored.
Vocal protests against government policies are not common in China and the bank scuffle took place at a politically sensitive time as Chinese President Xi Jinping is expected to be appointed for a third term at the Communist Party Congress which begins on Sunday (October 16). Xi has said "common prosperity" would be a priority.
Entrepreneur Shi, who only gave his surname, was one of the bank depositors who were not able to access his savings of 3 million yuan ($419,000), due to the banking scandal which centered on a string of rural lenders in
Henan and Anhui provinces.
"It's unbelievable," said Shi. "I simply deposited it in a state-approved bank. Now the money can't be withdrawn and it's affecting me badly. I may soon have to sell my apartment because I have no more money on hand. I can only sell my house, after which I can have at least food, drink, shelter, and living expenses. Right now I feel like my world is collapsing."
The 34-year-old did not join the July protest but said he had joined an earlier protest in May with hundreds of other depositors, who gathered outside the building of the Banking and Insurance Regulatory Commission (BIRC) in Henan’s provincial capital Zhengzhou to demand a response from officials.
China's banking regulator announced in July after the protests that Henan and Anhui provinces would start repaying many customers on behalf of the rural banks, and most of the depositors have since been reimbursed.
Shi said he was amongst several hundred, who made particularly large deposits and have yet to get their money back.
Another depositor, Lai Jingming, said he saved up 4.3 million yuan ($600,000) working as a salesperson in a construction material company for over 10 years. His savings were earmarked for his children's education and to provide for his elderly parents, but are now unaccessible in a bank in Henan.
Despite fears of repercussions from authorities, Lai, who participated in the July protest, was adamant in voicing his dissatisfaction.
"I have to do it so that I can live the rest of my life with security. Otherwise, without this money the rest of my life could be worse than death," said Lai.
China's Ministry of Public Security, the Henan and Anhui local governments, and police departments in those provinces and Beijing didn't respond to requests for comment for this story. The rural banks under investigation and the national banking regulator also didn't respond.
In spite of the discontent, Assistant Professor of Political Science at Yale University, Daniel Mattingly, said broad political apathy is likely to persist.
"I think the threshold for (people to be) taking to the streets, to demand large-scale political change is pretty high. And it's hard for me to connect the dots between these pretty specific grievances about specific policies that the government can eventually sort of meet. It's hard for me to see it translating into some sort of larger political movement demanding political change."
In recent years, a broader swell of popular anger, from mortgage strikes to COVID lockdown protests, has persisted despite a security clampdown that has been underway.
In September 2021 and January 2022, scuffles broke out at the headquarters of cash-strapped property developer China Evergrande Group, as disgruntled investors crowded its lobby to demand repayment of loans and financial products.
The real estate giant has been scrambling to raise funds it needs to pay lenders and suppliers, with regulators and financial markets worried that any crisis could ripple through China's banking system and potentially trigger wider social unrest. Since the real estate debt crisis erupted in 2021, thousands of home buyers have been caught in a similar predicament as cash-strapped developers went into bankruptcy or abandoned struggling projects.
In Guilin of southwest Guangxi province, some homebuyers moved into their unfinished apartments, living with unpainted walls, holes where electric sockets should be, and no gas or running water, in a bid to force the developers to finish the projects.
China’s uncompromising "zero-COVID" policy has also become the main source of dissatisfaction for many who were confined at home during lockdowns. As of Monday (October 10), 36 Chinese cities were still under various degrees of lockdown or control, affecting around 196.9 million people, versus 179.7 million in the previous week, according to research firm Nomura.
Despite China's small caseload compared with the rest of the world, its COVID lockdowns and restrictions have taken a heavy toll on the economy and population, the government has repeatedly urged people to accept the measures.
The world's second-biggest economy narrowly missed a contraction in the second quarter, growing just 0.4% year-on-year, weighed down by COVID-19 lockdowns, a weak property sector, and cautious consumer sentiment. The government has set a 2022 growth target of around 5.5%.
“I think that’s the very uncommon situation of economic downturn and people being unhappy but I think still people have this faith in it might get better. And that worries me sometimes because it needs a policy change to make it better, you can’t go on like this," said the president of the EU Chamber of Commerce in China, Joerg Wuttke.
China will persist with its COVID-19 policies to guard against new coronavirus strains and the risks they bring, People's Daily, the official newspaper of the Communist Party warned on Wednesday (October 12), four days before the Party Congress, crushing hopes of any near-term easing and potentially keeping any discontent among the population simmering under the surface.
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