According to Da Ji Yuan interview, small and medium rural banks face various pressures. Apart from dissolution, Chinese regulators also issued merger orders for many banks. Experts claimed the act was to cover their operation’s failure.

The Hebei Banking and Insurance Regulatory Bureau disbanded Wuqiang Jiayin and Fucheng Jiayin Rural banks on July 6 due to the acquisition and reorganization of small and medium banks.

After dissolution, these two banks had to cancel all their business activities immediately. Moreover, the two must return their financial licenses and transfer all of their businesses, properties, creditors’ rights, debts, and other rights and obligations, to Zhangjiakou Bank and become its sub-branches.

Wang He, a current affairs commentator, disclosed that the main reason for these bank dissolutions is that the Chinese regime’s control and management have failed since the development of rural banks in 2007.

Li Hengqing, an economist in the United States, added that China’s rural banks have a lot of abnormal activities. He accused the process of obtaining banking licenses from most rural banks of involving power and money transactions. 

Li explained that businessmen are likely the rural bank’s largest shareholders. After obtaining licenses to operate the bank, they change their company identity to raise funds via bank transactions. Rural banks transfer depositors’ money to support the shareholder companies, and once these businessmen avoid debts, depositors are the suffered ones.

Li continued, just by looking at China bank’s business, he could tell that China’s economy is at risk. The two banks in Hebei are a good example.

He said, “China’s systemic financial risks have become such a mess and cannot be recovered. I’m afraid that the CCP cannot handle the problem this time.”

Sign up to receive our latest news!

By submitting this form, I agree to the terms.