It has been just reported that the massive financial fears have managed to trigger a huge bank run in China. Check out the latest predictions about this below.
New China bank run is undergoing
According to reports from state-run Chinese media, thousands of customers are queuing up to withdraw their money from the Bank of Cangzhou, one of China’s regional banks, due to fears that it may go bankrupt.
The bank had lent hundreds of millions of dollars to Evergrande, a massive Chinese property developer that went bankrupt last year, and authorities are now working to prevent further financial contagion.
However, the bank has reassured customers that its risk and exposure to Evergrande is manageable.
“The overall risk is controllable and will not have a significant impact on the Bank’s operations, management and asset quality.
In order to recover the loan in full, our bank filed a civil lawsuit with the Cangzhou Intermediate People’s Court in July 2022 and won the lawsuit, and is currently executing the collateral disposal procedures in accordance with the law.”
Despite the bank’s statement, people continued to fear that it was on the verge of collapsing. As a result, several individuals were arrested in Cangzhou for spreading false rumors about the bank’s exposure to Evergrande.
The bank run coincided with reports that the Chinese government has taken new measures to prevent the spread of the country’s property crisis.
These measures include helping commercial banks and rural financial institutions replenish their capital, dispose of bad assets, and give them special-purpose bonds to raise money.
Banks are now prohibited from operating outside of their designated regions as part of the action to prevent contagion.
According to China’s National Administration of Financial Regulation, the country’s economy needs more resources directed towards rural revitalization and agriculture.
“[It is necessary] to focus on developing agricultural insurance, commercial pension insurance, and health insurance products to support agricultural production, pension needs, and basic livelihood security…
Comprehensively promoting rural revitalization is an important task in building a strong agricultural country in the new era. More financial resources must be allocated to the agricultural sector.”
