What are bank runs and why is China witnessing them?

What are bank runs, and why is China witnessing them? A bank run occurs when a large number of depositors rush to simultaneously withdraw their money as they no longer consider it safe with the financial institution. Bank runs among China’s small lenders have been rising over the last few years.

Is China's banking system cracking at its grass roots?

Economy / China Economy China’s banking system begins to crack at its grass roots as two bank runs take place within a week Local governments and police in both Hebei and Shanxi provinces were forced to intervene after rumours concerning Baoding Bank and Yangquan Commercial Bank

What are the latest bank runs among China's small lenders?

Bank runs among China’s small lenders have been rising over the last few years. While Henan protests are the latest to hit the headlines, at least two small lenders had witnessed a rush for withdrawals in 2019, and five lenders were hit by bank runs in 2020, according to Reuters. In most of these cases, police had to step in to calm depositors.

Do you need a bank run in China?

Bank runs are not necessary for most savers as bank deposits in China are guaranteed up to 500,000 yuan (US$70,000) per bank, however, investment wealth management products and trust investment plans, which are popular among Chinese residents and are often sold via bank branches, are not protected.