Beijing Imposes New Banking Management to Control People’s Wallets

June 17, 2020 Updated: August 7, 2020

The Peo­ple’s Bank of China (PBOC) announced the pilot plan of “large-sum cash management” in July. It is to impose stricter controls on accounts that reach a certain amount—for both individual and business clients. Analysts believe that authorities are attempting to take control of domestic bank accounts.

On June 10, the PBOC notified the public about rolling out the “large-sum cash management” plan, which will run for a two-year pe­riod.

It will start in bank branches located in Shijiazhuang in July, and Hangzhou and Shen­zhen in October. The account balance subject to such management is 500,000 yuan ($70,569) for public accounts, and 100,000 yuan ($14,114), 300,000 yuan ($42,341), and 200,000 yuan ($28,227) for individual accounts in the three pilot cities, respectively.

The pilot program would monitor personal and business transactions involving large sums, such as deposits, withdrawals, and cash flow coming in and out of China. Those withdrawing or depositing large sums would need to register such transactions, while transaction records and reports would be kept for companies in specific industries that deal in large sums.

Current affairs commentator Tang Jingyuan analyzed the implication of the policy on his Twitter account on June 11: “If you want to withdraw your own money, you must go through an appointment, a registration and an approval first. This is actually a full control of income and expenditure of any account above a certain range. The Party state is running out of money, so the petty bourgeoisie and the middle-class become their first targets.”

When the plan was first proposed in November 2019, many people criticized it over social media. They said that it’s a tactic to control people’s wallets.

The PBOC’s recent announcement has quickly drawn overseas Chinese comments: “The Communist gangster [regime] said: My money is my money, your money … how can you be entitled to any money? It’s all my money.”

Another comment read: “I believe this is the setup: in order to withdraw money, it needs to be approved through questioning. There might be a limit of the amount to withdraw. Those who are rich could run into a setup: the money is directly transferred by an internal employee. This type of scenario has happened too often. Search online and find out.”