Which of the two is a government obliged to defend first, the people or the banks? The contradiction is perplexing even if you think you know the answer to this question. While Chinese protest peacefully to demand that some of the nation’s banks restore their deposits, the government send in tanks to stop them.
Is the Chinese government taking the opposing side?
The tale of China’s bankrupt banks goes on. A video showing a long column of tanks placed along the streets to block entry to what appears to be a bank is making the rounds online.
This video, according to Chinese media, is from Rizhao in the Shandong province of China. One of the six banks hit by the crisis had a local branch, therefore these military vehicles were sent to guard it.
This action takes place in response to the Central Bank of China’s declaration that the money that savers have put in these institutions now qualifies as investment products. Additionally, this declaration makes it clear that depositors will be compensated.
The narrative is repeated.
The catastrophe in Tiananmen Square in 1989 is being painfully and grimly brought to mind by this circumstance. At the time, hundreds of armored tanks were stationed in China’s streets to quell citizen protests calling for the unfreezing of their funds.
This time, withholding amounts to more than 40 billion yuan, or almost $6 billion. The regional government said it will take the appropriate steps to ensure the money is returned. Nobody is certain of the exact timing or proportion of the compensation, though.
Furthermore, some depositors with balances of less than 50,000 yuan ($7,400) have apparently already received their funds. Everything else is up in the air.
In any event, this story demonstrates the unsettling truth that it’s not always a smart idea to trust centralized institutions.
