AFP

Chinese regulators on Friday offered repayments to more customers of rural banks whose withdrawals were frozen, in the ongoing saga of one of the country’s biggest-ever banking scandals that triggered rare mass protests. 

China’s rural banking sector has been hit hard by Beijing’s efforts to rein in a property bubble and spiralling debt, in a financial crackdown that has had ripple effects across the world’s second-largest economy.

Four banks in Henan province froze cash withdrawals in mid-April as regulators cracked down on mismanagement, locking hundreds of thousands of customers out from their funds and sparking sporadic protests.

The provincial banking regulator in mid-July said individual customers with deposits of up to 50,000 yuan ($7,341) would get their money back, after one of the largest protests erupted into violence.

Regulators have since been gradually offering repayments to more customers with deposits of higher value. 

On Friday, the Henan banking and insurance regulator promised to repay those who had deposited between 350,000 to 400,000 yuan ($51,300 to $58,600), saying in a statement that this group would begin receiving it on August 22.

The statement added that “repayments of (deposit amounts) under 350,000 will continue to be paid”, suggesting that not all customers with smaller bank balances had received their money yet.

Authorities have named the four banks as well as another rural bank in nearby Anhui province as involved in a scheme to defraud investors, and launched a police investigation.

The Henan banking scandal has dealt an unprecedented blow to public confidence in China’s financial system owing to the size and scale of the fraud, analysts say, with the banks involved allegedly operating illegally for more than a decade.

Chinese authorities are desperate to avoid disruptions to social stability just months away from a major congress of the ruling Communist Party. 

A July 10 mass demonstration in Henan’s provincial capital Zhengzhou was violently quashed, with demonstrators forced onto buses by police and beaten, according to eyewitness accounts given to AFP and verified photos on social media.

A provincial capital in southwest China has dimmed outdoor advertisements, subway lighting and building signs to save energy, official announcements said, as the area battles a power crunch triggered by record-high temperatures.

The mercury has soared beyond 40 degrees Celsius (104 Fahrenheit) in Sichuan province this week, fuelling massive demand for air conditioning and drying up reservoirs in a region reliant on dams for most of its electricity.

Factories including a joint venture with Japanese car giant Toyota in provincial capital Chengdu have been forced to halt work, while millions in another city Dazhou grappled with rolling power cuts.

“Hot and muggy weather has caused the city’s electricity supply for production and daily life to be pushed to its limit,” Chengdu’s urban management authorities said in a notice on social media Thursday.

Faced with a “most severe situation”, the city — home to over 20 million people — ordered landscape illumination and outdoor advertising lights to be switched off in notices issued Tuesday, the statement said. 

Building name signs will also be darkened.

The Chengdu metro said in a video on China’s Twitter-like platform Weibo that it would also turn off advertisement lights and “optimise” the temperature in stations to save energy.

Photos circulating on Weibo showed dimmed lights on metro platforms, walkways and in malls, with commuters walking in partial darkness.

The searing heat is also drying up the critical Yangtze River, with water flow on its main trunk about 50 percent lower than the average over the last five years, state media outlet China News Service reported Thursday.

Sichuan’s power woes could have ripple effects on the wider Chinese economy — the province is a key supplier of energy generated by hydropower to eastern industrial powerhouses including Jiangsu and Zhejiang.

China is battling extreme weather on several fronts, with 23 people killed and eight still missing after a flash flood in the northwest of the country on Thursday sparked by torrential rains.

Weather authorities in the eastern Jiangsu province warned drivers of tyre puncture risks on Friday as the surface temperature of some roads was poised to hit 68 degrees Celsius.

The China Meteorological Administration earlier said the nation was going through its longest period of sustained high temperatures since records began in 1961.

Scientists say extreme weather across the world has become more frequent due to climate change and that urgent global cooperation is needed to slow an impending disaster.

The world’s two largest greenhouse gas emitters are the United States and China. 

But this month Beijing announced it was freezing its cooperation with Washington on global warming in protest at a visit by US House Speaker Nancy Pelosi to Taiwan.

British retail sales surprisingly rose overall in July but consumer confidence is at a record-low level as the UK heads towards recession under a new leader, data showed Friday.

Sales by volume gained 0.3 percent last month following a slight drop in June, the Office for National Statistics said, while analysts’ consensus had been for another fall.

Online purchases “were boosted by a range of offers and promotions”, said Darren Morgan, ONS director of economic statistics.

“However, fuel sales fell with some evidence suggesting the very hot weather meant fewer people travelling.”

Morgan added that another fall in sales of clothing and household goods indicated “consumers are cutting back due to increased prices and concerns around affordability and cost of living”.

Separate data Friday showed UK consumer confidence at a record low.

“With headline after headline revealing record inflation eroding household buying power, the strain on the personal finances of many in the UK is alarming,” said Joe Staton, client strategy director at GfK.

Its Consumer Confidence Index fell three points in August to -44, the lowest level since records began in 1974.

The Bank of England expects the UK economy to fall into recession by the end of the year as consumers struggle with soaring energy and food prices.

British inflation stands above 10 percent, the highest level in 40 years, triggering big rises in BoE interest rates that in turn are putting further strain on consumers.

– Soaring interest payments –

The ONS on Friday added that interest payments on UK government debt surged more than 63 percent in July from a year earlier to £5.8 billion ($7 billion).

“Since mid-2021, the cost of servicing central government debt has increased considerably,” it said.

Sam Miley, senior economist at the Centre for Economics and Business Research, said ballooning interest payments reflected “the growing size of net public debt, as well as the mounting inflationary environment”.

Foreign Secretary Liz Truss, the favourite to replace under-fire Boris Johnson after he steps downs as prime minister next month, has pledged to cut taxes should she be voted into the top job by Conservative party members.

“The balance of risks to public finances has clearly shifted to the downside,” Michal Stelmach, senior economist at KPMG UK, said following Friday’s data.

“The cost-of-living crisis will likely require further support to households, while a slowing economy will put downward pressure on receipts.”