In China, the Communist Party wants to calm the discontent of the middle class

Less than seven weeks from the opening of its 20^e congress, the Chinese Communist Party (CCP) is closely monitoring social tensions. However, despite unprecedented population control since the Cultural Revolution (1965-1976), two sources of tension have recently emerged. In Henan, the fraudulent bankruptcy of four small rural banks threatens the ruin of thousands of savers who had been promised interest rates of 13% to 18%. However, since the spring, they are no longer authorized to withdraw their savings. Worse, across the country, insolvent property developers are unable to complete the works and deliver the apartments already paid for to the owners. In both cases, the population did not let it go and in both cases, the authorities are now seeking to ease tensions.

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Despite police repression, thousands of people had demonstrated on May 23, then on July 10, in front of the headquarters of the banks, in Zhengzhou, capital of Henan, to be able to withdraw their frozen savings. A number accused the authorities of complicity. In June, several hundred savers who had wanted to go to Zhengzhou had indeed seen their health code turn red, as if they had Covid-19. It was therefore impossible to buy a train or plane ticket. This first massive diversion of the health control of the population for political purposes had been strongly criticized throughout the country, including by certain official media.

For their part, also in the spring, home buyers, noting the stoppage of construction sites, launched a call on social networks for a boycott of payments, increasing the difficulty for developers. A call apparently very followed in spite of the censorship of which it was quickly the object.

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On Monday August 29, the Henan police announced the arrest of 234 people, members, according to them, of a “criminal organization”, accused of having participated in the financial embezzlement at the origin of the difficulties of the four small banks. Above all, the government supervises the reimbursement of savers, starting with the smallest deposits.

Structural weaknesses

Beijing can even less remain indifferent to the halting of building sites: 328 development projects in a hundred cities would be affected by the boycott, or around 5% of all building sites in progress. To facilitate the resumption of work, the government is preparing, according to the economic magazine Caixinto release 200 billion yuan (about 29 billion euros), a sum intended to allow local authorities to provide loans over two or three years at around 3% interest rate to promoters short of cash.

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