There have been runs on two small banks in China with depositors fighting to get through the doors to make withdrawals when they opened. Is this the first crack in the great wall of Chinese credit?
Reuters reported local news about queues outside the Sheyang Rural Commercial Bank in Yancheng yesterday and the Rural Commercial Bank of Huanghai faced similar rushes by depositors today after rumors of insolvency at Sheyang. Officials say it is impossible for a Chinese bank to go bankrupt.
Real estate crash
However, financial institutions have made large loans to private and state developers whose project lie abandoned and their loans cannot be repaid. Where are the banks to find the money to pay out to depositors who want to withdraw their money?
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