Thousands of Chinese were unsettled on Sunday when one of China’s four largest state-owned banks, the Industrial and Commercial Bank of China, was unexpectedly “paralyzed” for nearly an hour.
The bank’s over-the-counter, automated teller machine, Internet, and mobile services were all affected in the outage, which hit the cities of Beijing, Shanghai, as well as the provinces of Guangdong, Hubei, Sichuan, and Liaoning, according to the China National Radio, a state-run media outlet.
Online Internet shopping payments, bank card payments to shopping centers, supermarkets, and hospitals were also impacted, China National Radio said; in some areas, even China UnionPay, the country’s largest bank card network, was also affected.
According to China Central Television, an official mouthpiece, “the paralysis lasted up to 45 minutes,” though accounts by netizens online indicate that it may have been longer. Whatever the length, the sudden lapse in service by the largest bank in China—and the largest in the world in market value—was worrying to many.
“Why did China’s largest bank have such a severe breakdown?” CCTV asked in a post on Sina Weibo, a popular Twitter-like platform.
Some thought that it may have been due to a computer systems upgrade. “If they’re upgrading their system, they should notify beforehand,” one netizen remarked in response. “Such a strange outage, there is something fishy about it. It looks like the tragedy of China’s financial system is about to erupt!”
“It’s happening,” said nanjibing9. “The real estate bubble is about to burst.” Another user, Wosiguwozai1971, said: “Upgrading? If only. Could it be that they’re out of X?” The user apparently replaced the character for money with an “X” for fear that it may be censored.
ICBC had actually made a public announcement on its website that it planned to suspend service from 0:10 to 1:40am on June 23, to “optimize the system.” ICBC said on its official Weibo at around midday that from 10:38am to 11:23am an upgrade to its computer system—it was unclear whether the same upgrade was being referred to—caused a “slowdown.”
But China National Radio reported entering branches in Beijing with notices stuck to the glass saying that there had been a “malfunction,” and that withdrawing money over the counter or through ATMs was not possible. A CCTV reporter said that when he called the customer help line, he also received an automated message saying there was a “malfunction.”
Two theories about the outage percolated to the top online: one, that the bank was tight for money amidst the recent news of a sharp spike in interbank interest rates — the amount that banks charge each other for lending money — which fanned fears of an impending financial crisis in China.
The other proposed reason was a more complex political analysis, which suggested that the bank was engaged in a bout of high-stakes jousting with premier Li Keqiang. Li had just days previously, on June 20, announced what the International Business Times described was a policy that would “go down in banking history.”
Li encouraged private capital to help with the “restructuring” of financial institutions and banks in China, and advocated that “non-government affiliated banks” be established, which will need to evaluate risk themselves. Bank stocks tumbled the following day, IBT said. The banking system in China is currently overwhelmingly dominated by four major state-run banks, and the traditional role of banks — as evaluators of risk — is often absent.
Commentators online suggested that ICBC’s mid-morning outage may have been a push back against Li’s new economic agenda. “They’re forcing the emperor to abdicate,” wrote a netizen calling himself “V for Vendetta in China,” in response to CCTV. “They trying to force the central bank to throw in the towel,” meaning, to pump credit into the financial system.
