China: The Henan Bank Run and the Mass’ Struggle against Tyranny and Crisis

A slew of banking crises, struggles, and repression have recently rocked the rural areas of Henan province in China. Earlier in the year, several local banks declared that customers could no longer withdraw their own savings. The depositors quickly organised a struggle against the banks, which were aided and abetted by the CCP bureaucracy. Despite living under the most technologically advanced surveillance state in world history, the depositors’ protests soon escalated from economic to political demands and slogans. These unprecedented developments garnered widespread attention across China, as many workers and youth fear for their future amidst lockdowns and real estate crises that threaten to spill into other sectors of the economy.

After months of mass struggle and government repression, the Chinese state has begun returning the savings of depositors at five Henan and Anhui rural banks. However, nothing has been fundamentally resolved. These concessions won’t conceal the barbarous and reactionary nature of China’s despotic capitalism, which has been exposed by this event.

The Bank Run and Initial Struggles

As of April this year, multiple banks from the rural regions of China’s Henan and Anhui provinces, have ceased providing withdrawal or transaction services to their savings account depositors. Back in March police announced that Sun Zhenfu, the former vice president of Xuchang Rural Commercial Bank, which sponsors five of these rural subsidiary banks, was wanted for “serious economic crimes”. According to reports, tens of billions of yuan from about 400,000 depositors were affected. 

Covid Codes China Image Fair UseCovid health codes have become a tool of political control in China / Image: Fair Use

After a month of fruitless waiting, hundreds of depositors gathered outside the China Banking Regulatory Commission (CBRC) in Zhengzhou (the provincial capital of Henan). The protesters carried signs with slogans like, “return my savings”. That a protest of this scale was able to take place – despite extremely harsh  COVID-19 restrictions and the generally repressive environment under the Chinese Communist Party (CCP) regime – illustrates the rapidly rising fury of the depositors.

However, what really drew national attention to the bank crisis was the Henan red health code scandal. Over a thousand rural bank depositors’ COVID-19 health code suddenly turned red for no reason whatsoever. A red code usually indicates high risk of infection, leading to that person being banned from public spaces. This move stirred up anger towards bureaucratic arbitrariness among the anger of masses, stoking fears of anti-COVID measures being used to strengthen the CCP’s political control.

Facing a tidal wave of criticism from the public – which was even publicly commented on by conservatives like Hu Xijin, former chief editor of the party-owned Global Times – the CCP attempted a familiar manoeuvre in an attempt to defuse the masses’ anger.  It attributed the scandal to the actions of a few local officials individually violating party disciplines and state regulations. The party consequently subjected these officials to disciplinary measures and declared that it “does not tolerate changing the health code for reasons other than pandemic control”.

However, although the CCP promised “the strictest and heaviest punishment” for the offending officials, to date, no one has actually been prosecuted. Meanwhile, ordinary citizens face detention and even criminal sentences should they attempt to falsify their health codes. It is thus clear that punishment is “strictest and heaviest” only when it meets the interests of the bureaucracy.

The July protest and its aftermath

In the following months, there have been a number of smaller protests (including one on 27 June at which the police used warning shots to disperse the crowd), and a second red health code scandal against the depositors. But no plans were made on the part of the bank or the state to return savings to depositors. The lack of sincerity and the inflated arrogance of the state has thoroughly irritated depositors, which led to a large-scale protest on 10 July.

Injured protestors Image Fair UseInjured protestors / Image: Fair Use

Over a thousand depositors carried banners with slogans like, “no savings, no human rights”, “against the corruption and violence of the Henan government”, “against the abuse of power, against the beating of depositors by Henan government-aligned gangs”. Others shouted the slogan: “Li Keqiang [China’s premier], investigate Henan!”

The regime immediately deployed large numbers of police around the protest and ordered it to disband. Their efforts were in vain. A group of “unidentified men” wearing white shirts then plunged into the protest, dragging and beating them in order to disperse the crowd. At the same time, the police, who are often referred to as “protectors of the people'' in China, stood aside and watched the carnage unfold without intervening. It seems the protesters are not the “people'' they exist to supposedly protect! Many of the protesters were severely injured by the thugs. Some were beaten until they bled from their eyes or mouth. One disabled protestor was even battered unconscious.

The mainstream Chinese media, which had denounced the Henan red health code scandal, maintained complete silence over this incident. One exception, Life Week (《三联生活周刊》), cautiously referred to it in a feature report on the bank crisis, saying the protestors “had a conflict with the police and some unidentified people, and some were injured” (our emphasis).

Nevertheless, the denunciations of these barbarian actions grew rapidly on social media. Some social media users compared the public photos of policemen in the area and these ‘unidentified’ men in white, and found that some of the white-shirted thugs had a strong resemblance with registered policemen, further exposing the hypocrisy and cruelty of the police state.

However, no doubt because of the resolve shown by the protesting depositors, the state quickly made a series of concessions. On 10 July, the Xuchang police announced, “a criminal group headed by Lyu Yi, through Henan New Fortune Group and co… controls several rural banks such as Yuzhou Xinminsheng… [They] used them to illegally transfer funds,… manipulate business records, and conceal information. These acts implicate Lyu in multiple serious criminal offences.” 

On 11 July, just a day after the protest, Henan’s Local Financial Regulatory Bureau announced that “commencing from 15 July, repayments would be made [to depositors], starting with individual customers with deposits of up to 50,000 yuan in one institution.” The second round of repayments, which deals with deposits up to 100,000 yuan ($14,787), began on 25 July. Thus, despite the repression of the government, the movement has scored victories.

How did the movement develop?

The protesting depositors have shown resolution and bravery from the start, especially in face of the authoritarianism of the CCP regime. Nevertheless, the July protest had a significantly different spirit to those in May and June. This was an expression of the dialectic of the movement’s development.

Henan depositors Image Fair UseThe depositors only made economic appeals in earlier protests, which has then gained a political character / Image: Fair UseOf course, the July protest was the biggest, and it signified a rise in the movement’s intensity. However, most significant of all was the politicisation of this protest’s slogans – something that is extremely rare in China. Slogans raised in May and June like, “return my savings,” were purely economic, and did not directly attack the regime. The arrogant bureaucrats, however, couldn’t even tolerate protests as moderate as these. Far from responding in a reasonable way, the local bureaucrats resorted to brutal crackdowns, which in turn spurred the depositors to draw political conclusions. Furthermore, the Chinese masses could feel – if not consciously understand – how in two red health code scandals, the byzantine state machine had demonstrated how it fundamentally opposes their basic human rights.

As the conflict intensified, the protesters on 10 July didn’t limit themselves to demanding repayment alone, but raised general slogans with political intentions. They targeted the “abuse of power” and “corruption and violence” of the Henan government, and demanded “(genuine) freedom, equality, justice, and rule of/by law” [the Chinese word “法治” means both]. Although these demands are largely taken directly from CCP’s own propaganda, which portrays China as already having all these things, they nonetheless indicated a qualitative leap in the movement from the economic to the political.

Of course, it is hard to say how important these political demands really were to the protesters, but they certainly indicated their disgust – not to mention distrust – towards the regime. At the same time, the fact that the protesters used the slogans of the regime itself to criticise it reflects a growing political understanding (although it is still generally low) among an ever-increasing portion of the Chinese masses, and that the regime’s legitimacy has been shaken.

The government’s continuous repression, on one hand demonstrated its sheer contempt for the masses, but on the other hand exposed its lack of confidence and its fear of mass movements. This duality is expressed in how, after the brutal dispersal of the July protest, a repayment plan was immediately brought forward. Even in the face of such peaceful protests, the bureaucracy was afraid that direct concessions would weaken its image of absolute authority, and encourage further mass struggles. This attitude illustrated their impotence in dealing with social problems, and how they can only rely on force. As Bertolt Brecht said, “fear rules not only those who are ruled, but the rulers too.”

At the time of writing, the state is still repaying deposits under 100,000 yuan, and it is unknown when all deposits might be returned. Nevertheless, the struggle, and the crimes of the state displayed through this episode will remain in the minds of millions of Chinese people. It is one in a chain of struggles of the gradually awakening Chinese masses, which is subtly altering their consciousness. As new storms approach, future fighters would do well to study the valuable lessons contained in this event.

A barbarous social system

The protesters no doubt raised the slogan, “no savings, no human rights” in an attempt to emphasise their right to reclaim their deposits, but they also semi-consciously demonstrated that in China, or indeed any capitalist country, property ownership is the precondition of so-called ‘human rights’. In this system, which places profit above people, the only way to guarantee our rights on paper – including the right to life and health – is to have enough wealth.

The tragedies that many working-class depositors had to endure as a result of this bank run is a reflection of this brutal social reality. After the bank crisis broke out, a former accountant lost sight in her left eye due to extreme anxiety, and was unable to afford proper medical treatment without the help of her sister’s family. More appallingly, a clerk, who was ill herself but refused treatment due to the need to prioritise treating her mother’s diseases, had to abandon her mother’s treatment due to a lack of money. She was even unable to afford a grave after her death.

To these depositors, the months of delays in the state’s response was undoubtedly a crime. At the same time, the head of the New Fortune Group, Lyu Yi – a passionate collector of antiques – has been continuing his extravagant life in the United States.

The brutality of the regime and its failure to apply even its own laws, must be exposed and criticised thoroughly. But the mere demand for a ‘reliable’ bourgeois government – as many liberals in China and internationally raise – cannot fully answer the question that is posed. A capitalist society with better protection of workers’ incomes, although obviously less terrible, remains a society that prioritises profit and that is indifferent to human suffering. Even if the banks function ‘normally’, tragedies like these will remain regular occurrences.

Moreover, although the state has blamed corrupt local bureaucrats and unlawful businessmen for this crisis – attempting to portray it as an accidental occurrence – we must understand that capitalism can never eliminate the collusion between the capitalist class and the state. The recently leaked ‘Uber files’ confirm this. In the same way, it can never eliminate oppression and violence. Besides, the Chinese economy is now facing various simultaneous debt crises. These include a crisis in which banks have been unable to provide houses to home buyers, leading to the boycott of mortgage repayments by borrowers. These crises illustrate the pressure exerted by the economic downturn on the Chinese banking system, again placing the masses’ savings at risk. The fundamental problem then is not a group of recklessly corrupt officials. Rather, it is the system of capitalism itself, i.e. what the CCP farcically calls ‘socialism with Chinese characteristics’.

What we really need is a society that puts human needs above profits, meaning a democratic economy planned by the working class. This requires the abolition of capitalism. To achieve this, it is necessary for the masses – above all, the proletariat – to unite under a Marxist programme, and to struggle determinedly against the Chinese capitalist class and its despotic regime, not only for transitional democratic and labour rights, but for a socialist revolution.