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China and Covid19

Fangcang Diaries: China’s Makeshift Covid Hospitals, from Wuhan to the Future

Fangcang hospitals are here to stay as long as China sticks to its current zero-Covid path.

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By mid 2020, many thought Fangcang, China’s Covid-19 makeshift hospitals, had become a thing of the past. Instead, they have become a part of the country’s future. Through the course of the pandemic, perceptions of China’s ‘square cabin’ Covid hospitals have drastically changed. Chinese social media users get a glimpse of life inside the Fangcang hospitals thanks to patients’ online diaries, videos, and photos.

 
This is the “WE…WEI…WHAT?” column by Manya Koetse, original publication in German by Goethe Institut China, visit Yi Magazin: Fangcang ohne Ende: Chinas Covid-Krankenhäuser damals und heute.
 

In February of 2020, the impressive construction of two enormous emergency field hospitals in Covid-stricken Wuhan captured the world’s attention. The Huoshenshan and Leishenshan Hospitals were constructed in a matter of days and combined they could take in 2,500 patients. The construction process was live-streamed by state media and sped-up drone footage of a large empty field transforming into a fully functioning hospital received millions of clicks around the internet.

Along with mass-testing and local lockdowns, the so-called ‘Fangcang’ shelter hospitals are seen as a key solution in ‘fighting Covid-19 the Chinese way’ to alleviate the pressure on public hospitals and lower Covid-19 mortality rates by quarantining and treating patients with confirmed infections.

Within a matter of 2,5 years, Fangcang emerged as a novel concept on China’s coronavirus battleground and then became a part of everyday life in a zero Covid society. Here, we will zoom in on China’s Fangcang phenomenon and changes in the public’s perceptions of it.

 

MORE THAN MASH: THE NOVEL FANGCANG CONCEPT

 

Fāngcāng (方舱) literally means ‘square cabin,’ referring to a modular or prefabricated mobile cabin hospital. Although the concept of an emergency field hospital or makeshift hospital is not new, Fangcang hospitals are labeled as a “novel public health concept” due to their specific use during China’s Covid crisis (Chen et al 2020).

Some studies say that China’s Covid-19 Fangcang hospitals were modeled after emergency cabins used during the Wenchuan and Yushu earthquakes in 2008 and 2010 (Wang et al 2020, 2). According to the biggest Chinese-language online encyclopedia, Baidu Baike, the term actually comes from the United States, where the U.S. Army first started developing such cabins – Mobile Army Surgical Hospitals (MASH units) – in the early 1950s and used them during the Korean War. The Chinese Fangcang hospital, however, is not really the same and the concept was implemented for the first time in Wuhan in February 2020.

Aerial view of the American 46th MASH unit (photo by Robert L. Emanuele, published at https://bulletin.facs.org/)

In China, Fangcang hospitals are large, temporary hospitals for the isolation, treatment, and disease monitoring of Covid-19 patients with mild-to-moderate symptoms. By taking in and quarantining people who have tested positive for Covid-19, they are meant to reduce the transmission of the virus within households and communities, while also providing treatment to patients with mild symptoms (Fang et al 2020, 2). In doing so, they dramatically reduce the pressure on regular hospitals, which need their beds to solely treat patients with severe and critical conditions.

Construction of Huoshenshan Hospital, image via Sohu.com.

The 1,000-bed Huoshenshan Hospital (火神山医院) was constructed within a matter of days, starting on January 23, 2020, and ending on February 2. The first patients were admitted a day later. The construction of the 1,500 bed Leishenshan Hospital (雷神山医院) started on the 26th of January and was completed on 6 February 2020.

Many other Fangcang hospitals were not constructed like these shelter hospitals but were built by converting large (public) buildings such as exhibition centers, stadiums, or schools into healthcare facilities. In Wuhan, over a dozen more Fangcang hospitals were opened in February of 2020 to provide beds for Covid-19 patients before all being suspended on March 10 of that year when the crisis was under control.

 

FANGCANG ON SOCIAL MEDIA: A CHANGING IMAGE

 

In the early stages of the pandemic, Chinese social media users got a glimpse of life inside the Fangcang hospitals through official media videos and through footage and photos posted by people staying there. Up to the present day, patients share their quarantine experiences on social media using hashtags such as “Fangcang Diaries” (#方舱日记#).

Medical workers leading a dance exercise session for COVID-19 patients at a Fangcang in Wuhan, March 2020. Photo posted on Weibo (@滨州文旅).

In the Wuhan days, there were videos of patients dancing together inside the hospitals, with people cheering on the positivity of patients and the dedication of the healthcare workers.

Photo posted from a Wuhan Fangcang by Weibo user (@121314人生需要转折) on February 29, 2020.

One photo of a patient reading Francis Fukuyama’s The Origins of Political Order even went viral on Weibo. Many admired the patient for reading such heavy literature during his Fangcang stay and the man became famous overnight as ‘the invincible Wuhan-er.’

The Invincible Wuhan-er, see more here.

A young woman known as A Nian (阿念) also wrote on social media about her quarantine stay at one of Wuhan’s Fangcang hospitals in February of 2020. When her grandmother fell critically ill during her stay at the city’s Huoshenshan hospital, A Nian asked to be transferred to the same Fangcang so that she could take care of her. Despite having A Nian by her side, the grandmother passed away. A Nian’s experiences at the Wuhan Fangcang hospitals were eventually published in the book Wuhan Girl A Nian Diary (武汉女孩阿念日记). The book paints a picture of the Fangcang where resilience, warmth, and optimism dominate the overall atmosphere.

The Covid-19 outbreak in Wuhan was a national war against the virus, and the Fangcang hospitals were described and represented as a necessary and praised tool within this united fight. The medical staff members working there were the heroes on the frontline, and many social media users honored and thanked them for their efforts.

After the shelter hospitals in Wuhan gradually closed, the social media focus shifted to how the Covid crisis became a pandemic and caused chaos in the rest of the world. By April of 2020, Wuhan had returned to a state of normalcy, and schools across the country reopened. When Huoshenshan and Leishenshan closed their doors, Fangcang soon seemed to become a thing of the past.

Although there were local outbreaks of Covid-19 in China throughout 2020 and 2021, the Fangcang hospitals did not really return to the public spotlight until Xi’an saw cases spike in late 2021 and early 2022, with the city becoming the epicenter of the biggest Covid outbreak and lockdown since Wuhan.

By January of 2022, the city of Xi’an had started to construct large sites for isolation of people who tested positive for Covid-19, in addition to designated hospitals. Besides ‘Fangcang,’ these were also called ‘Centralized Isolation Points’ (集中隔离点).

As later explained by Dr. Wu Jinglei, director of Shanghai Municipal Health Commission, Fangcang hospitals can also be used as ‘Isolation Points.’ The two are the same but using ‘Isolation Point’ instead of ‘Fangcang Hospital’ emphasizes the need to also isolate and observe patients who are asymptomatic at these health locations, besides treating those with mild-to-moderate symptoms. Later on, these locations also started to be referred to as ‘Fangcang Isolation Points’ (方舱隔离点) or ‘Isolation Fangcang’ (隔离方舱).

One story that attracted major attention on Chinese social media and indicated changing perceptions of the Fangcang phenomenon was the midnight eviction of residents of the Xi’an Mingde 8 Yingli community (明德八英里小区) in Xi’an. Just after midnight on January 1st of 2022, residents received news that they would be transferred by buses, and quarantined away from their compound due to new infections in their proximity.

Residents voiced their concerns on social media about the incident, saying they were unsure of where they were heading, and that they were put in buses together for hours until being driven off to a remote Fangcang without proper supplies. The term ‘bèi lāzǒu’ (被拉走) was used, ‘being dragged away.’

Old people, young children, and pregnant women were among those being taken away for quarantine without being provided with the things they needed, and without any measures to protect them against the dangers of infection. An image of an old man with a walking cane standing in line to be taken away for quarantine went viral online as many worried about his wellbeing. He was seemingly all alone and did not seem to have any luggage or food supplies with him.

Seeing photos of old buildings without proper facilities being turned into Fangcang, many residents wondered what the point of this kind of isolation was. One popular post by a Weibo user nicknamed ‘In Between Memories’ from January 2nd of 2022 said:

“I don’t understand why negative-tested families should be dragged away for isolation? Isn’t isolation at home also isolation? The Fangcang hospitals were built to focus on treating the mildly ill, separately from the seriously ill. But nowadays, after discovering one positive case, Xi’an wants to pull away the entire neighborhood to a centralized quarantine with poor conditions – even if everyone has already been in home quarantine for over a week. Is this all just so that Xi’an can say it has zero infections while ignoring the scientific basis that many families tested negative multiple times? While disregarding the special needs of families with elderly, young, sick, disabled, and pregnant people? Before transferring people, you never provided them with a policy basis, nor was there any warning or reminder given to the citizens of Xi’an that you would implement [this policy] on the spot in the middle of the night. Now that everyone is at risk, perhaps some will support this, hoping that there can be zero cases within the community in a time frame of three days. But there are more residents who are only worried that the next one to be dragged away will be them. After all, we will be taken away even if we stay well at home and test negative ten times for the nucleic acid test, what about the elderly and our children, what about our pets? No one cares, they only care about their hard target to clear the city of Covid within three days.”

Within three weeks of lockdown, Xi’an was the first city to have so many patients admitted to Isolation Points: nearly 50,000 people were isolated at 443 different Fangcang quarantine locations across Xi’an (Southern Weekend 2022).

January 5 2022, a Fangcang or Isolation Point with over 1000 separate isolations rooms is constructed in Baqiao District of Xi’an (Image via Renmin Shijue).

The fears of being taken away to Fangcang hospitals and Isolation Points also became a reality for Shanghai residents after an unprecedented Covid-19 spike in the city, starting in March of 2022. As the city entered a phased lockdown, photos and videos of a local quarantine site where babies and small children were kept in isolation – separated from their parents – went viral on Chinese social media.1

Not long after, patients at Fangcang hospitals started posting on social media about their experiences, complaining that there was a lack of basic supplies, that they were not given the medicine they needed, and that vulnerable patients were left to their own devices without proper care.

As the Covid-19 cases continued to spike throughout March and April, videos also started surfacing showing chaotic scenes at some Fangcang sites in Shanghai where patients were fighting over supplies such as blankets, water, and food, some crying when they were unable to get anything but some bottles of water – or nothing at all.

The apparent disorganization at quarantine facilities from the city’s Pudong to Minhang Districts triggered discussions on Chinese social media about why asymptomatic patients were taken off to these ill-equipped centralized Fangcang locations at all and why they were not allowed to isolate at home instead.

Chaotic situation at a quarantine location in Shanghai’s Pudong in early April 2022 (video).

One Weibo user wrote in April 2022:

“They took us to an isolation site. If the conditions had just been a bit better, we’d be okay with it, but this is just unimaginable. These are the facts. Over 800 people have entered this facility since April 9, their ages varying from seventy or eighty years old to babies just a few months old. 1. Inside the factory building, there are plank beds without mattresses, there are no people to clean. 2. There is no supervisor, we need to fight over our food. 3. There are not enough supplies, not even enough toilet paper. 4. 80% of the toilets are clogged, there’s nobody to clean them. 5. There are no doctors and nobody to take care of patients with a fever. 6. There is no one to dispose of the garbage. 7. The weather’s hot, but there’s no place to shower or change clothes.”

Patients shared a photo of the toilets at one Pudong quarantine location (more here).

Stories also started coming out of patients being taken away to Isolation Points many days after they had first tested positive for Covid. By the time they were finally taken away for quarantine, they had recovered and tested negative for Covid-19, yet still had to go and stay together with patients testing positive.

To create more beds for patients, Shanghai opened China’s largest-ever Fangcang hospital on April 8 at the National Exhibition Convention Center. This Fangcang, built by the same people who had helped build Huoshenshan and Leishenshan in Wuhan, had a capacity of 50,000 beds for Covid-19 patients.

These bigger, modern, and central Fangcang locations are generally neat and orderly, providing regular meals and medicine, as well as offering various activities or even setting up classrooms for quarantined students.

But photos, footage, and online diaries posted on social media exposed the stark differences in living conditions between different Fangcang hospitals. By late April of 2022, patients staying at one Fangcang location in the city’s Putuo District – an office building converted into a makeshift hospital – complained about the crowded living conditions, the lack of washing rooms and showers, and the inadequate supply of food and drinking water. At other facilities, patients posted videos of water pouring into the building after heavy rain.

Wide-angle view of the Shanghai office buildings that have been converted to Fangcang hospitals (What’s on Weibo).

Inside the office converted into Fangcang, photo via Weibo.

From Wuhan in 2020 to Shanghai in 2022, the public perception of the Fangcang phenomenon in China changed dramatically. While it was initially seen as an effective, efficient, and celebrated response to the outbreak of Covid, many Shanghai-based residents, during the peak of the city’s Covid crisis, feared the Fangcang more than the virus itself, as stories about overcrowded, disorganized and unequipped facilities kept surfacing online.

 

THE FUTURE OF FANGCANG

 

By mid-May of 2022, after seeing over 60,000 confirmed Covid-19 cases in total, Shanghai retired half of its Fangcang locations due to rapidly declining cases. Nevertheless, the restrictions to keep Covid under control are still stringent.

As Chinese leadership remains adamant on sticking with its zero-Covid strategy, state media emphasize the need to uphold the mandatory quarantine system as part of this public health policy, which basically means the country will not opt to ‘live with the virus’ but instead will continue to implement strict measures to eliminate a Covid outbreak as fast as possible once it emerges.

Fangcang are here to stay as long as China stays on its current zero-Covid path. The country’s top epidemiologist Liang Wannian (梁万年) maintains that patients need to be isolated at a centralized location because they can be easily monitored and treated that way, while also minimizing the risks of them spreading the virus to others in their household or community.

In preparation for potential future outbreaks, cities across China are building new Fangcang or are improving existing ones. Authorities are making sure that the country is ready to manage more local outbreaks, avoiding messy Fangcang scenes like the ones in Xi’an or Shanghai.

On May 13, China’s National Health Commission called on all provinces to build or renovate city-level Fangcang hospitals, and to make sure they are equipped with electricity, ventilation systems, medical appliances, toilets, and washing facilities.

The country-wide Fangcang preparation plan is now in full swing. In Zhengzhou, for example, construction workers are building a new Fangcang from the ground up. The city of Zhoukou recently issued a promo video on Weibo showing off their local brand-new Fangcang location with 356 private rooms equipped with air disinfection systems, private showers, and free Wi-Fi. Meanwhile, Shanghai even introduced its first Fangcang location for pets.

Zhengzhou’s new Fangcang, construction work in mid-May 2022 (Weibo via @顶端新闻).

When it was announced that China would withdraw as the 2023 Asian Cup host due to the pandemic, netizens joked that the stadiums constructed for the sports event could now be turned into Fangcang instead.

“The Fangcang will become a regular facility in the next few years,” some social media users commented. Others wrote: “This is good news. It’s better to be prepared for what’s coming,” and: “Better to prepare to build the Fangcang now than to prepare to build our future graves.”

Weibo user sharing photo from one Shanghai Fangcang (@路漫漫的碎碎念)

Generally, despite worries over a lack of medical care and supplies at facilities, many people do support the idea of their cities being prepared for an immediate Covid response once it’s necessary. “I don’t get why people are being negative about building new Fangcang,” one Weibo user from Hebei Province writes:

“People think that they should stay home if they get infected but want other people to quickly go away to a Fangcang hospital if they’re sick. Our little town is now also building a Fangcang, and I think it’s a good thing. Before, there were too many infections in the neighboring village, and they took them for isolation to the hotel in our city center and all stores in the vicinity had to close. (..) It was scary, people didn’t want to visit the center anymore. Now, they’re building a Fangcang at the town border, away from the people, and it’s a relief for all of us.”

Meanwhile, Fangcang patients keep sharing their journals online. “Today is day seven for me,” one Shanghai resident wrote on Weibo: “I finally had an egg for the first time here. I’ve been constipated all week (..) This morning, I heard I meet the conditions to be discharged [two negative tests in a row], but due to the lack of capacity I’m still waiting, and it might still take two or three more days before I get to go home.”

“It’s day twelve. I can’t wait until I’m released from ‘prison’,” one person wrote.

Kids playing inside a Shanghai Fangcang Isolation Point, pictured shared on Weibo.

“It’s my first night at the Fangcang,” one Weibo user writes in another online ‘Covid journal’: “There’s too much light and noise, and my dad and I took turns in waking up. Eventually, he decided to get up, thinking it was 5 am, until we discovered it was just past 2 am. I felt light-headed as I headed to the bathroom.”

One patient at another Shanghai Fangcang writes: “My stay at the Fangcang is better than I had expected. I am sleeping better than at home and don’t have to think about what I am going to eat. But there are many elderly people inside here, and I see them suffering. I’m not sure if this policy really helps them.” They also write: “I’d better record all of this. I think this is going to be an experience I’ll remember for the rest of my life.”

 

By Manya Koetse
Follow @whatsonweibo

 

1 On April 6, 2022, Shanghai changed the policy and announced that parents can apply to accompany their children during central quarantine after signing an agreement, regardless of whether they’ve tested positive for the virus or not.

 

References (other sources linked to inside the text)

Chen, Simiao Chen, Zongjiu Zhang, Juntao Yang, Jian Wang, Xiaohui Zhai, Till Bärnighausen, Chen Wang. 2020. “Fangcang Shelter Hospitals: A Novel Concept for Responding to Public Health Emergencies.” The Lancet, April 2             https://www.thelancet.com/journals/lancet/article/PIIS0140-6736(20)30744-3/fulltext [May 12, 2022].

Fang, Dongpin, Shengjie Pan, Zaishang Li, Ting Yuan, Benran Jiang, Di Gan, Bai Sheng, Jing Han, Tao Wang, Zhongmin Liu. 2020. “Large-Scale Public Venues as Medical  Emergency Sites in Disasters: Lessons from COVID-19 and the Use of Fangcang Shelter Hospitals in Wuhan, China.” BMJ Global Health 5:  1-7.

Luo, Hanbin, Jiajing Liu, Chengqian Li, Ke Chen, Ming Zhang. 2020. “Ultra-Rapid Delivery of Specialty Field Hospitals To Combat COVID-19: Lessons Learned from the Leishenshan Hospital Project in Wuhan.” Automation in Construction 119 (103345):  1-10.

Southern Weekend 南方周末. 2022. “The Largest Centralized Quarantine: 49,678 People in  nearly One Month, What Has Xi’an Invested 最大规模集中隔离:近一月49678人,西安付出了什么” [In Chinese]. Sina News, January 13  https://news.sina.cn/2022-01-13/detail-ikyamrmz4934227.d.html [May 13].

Wang, Ke-Wei, Jie Gao, Xiao-Xiao Song, Jiang Huang, Hua Wang, Xiao-Long Wu, Qin-Fang Yuan, Xiao-Shan Li, Feng Cheng, Yang Cheng. 2020. “Fangcang Shelters Are a One  Health Approach for Responding to the Covid-19 Outbreak in Wuhan, China.” One Health 10 (100167): 1-6.

Featured image by Ama for Yi Magazin.

This text was written for Goethe-Institut China under a CC-BY-NC-ND-4.0-DE license (Creative Commons) as part of a monthly column in collaboration with What’s On Weibo.

Spotted a mistake or want to add something? Please let us know in comments below or email us. First-time commenters, please be patient – we will have to manually approve your comment before it appears.

Manya Koetse is the founder and editor-in-chief of whatsonweibo.com. She is a writer, public speaker, and researcher (Sinologist, MPhil) on social trends, digital developments, and new media in an ever-changing China, with a focus on Chinese society, pop culture, and gender issues. She shares her love for hotpot on hotpotambassador.com. Contact at manya@whatsonweibo.com, or follow on Twitter.

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China and Covid19

Confusion over Official Media Report on China’s “Next Five Years” of Zero Covid Policy

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‘The next five years’: four words that flooded Chinese social media today and caused commotion among netizens who interpreted this as written proof that China’s current Covid strategy would continue for at least five more years. But the Beijing Daily editor-in-chief has since responded to the issue, blaming reporters for getting it all mixed up.

On June 27th, after the start of the 13th Beijing Municipal Party Congress, Chinese state media outlet Beijing Daily (北京日报) published an online news article about a report delivered by Beijing’s Party chief Cai Qi (蔡奇).

The article zoomed in on what the report said about Beijing’s ongoing efforts in light of China’s zero-Covid policy, and introduced Beijing’s epidemic prevention strategy as relating to “the coming five years” (“未来五年”).

Those four words then flooded social media and caused commotion among netizens who interpreted this as a sign that China’s current Covid strategy would continue at least five more years. Many people wrote that the idea of living with the current measures for so many years shocked and scared them.

Soon after, the article suddenly changed, and the controversial “coming five years” was left out, which also led to speculation.

Beijing Times editor-in-chief Zhao Jingyun (赵靖云) then clarified the situation in a social media post, claiming that it was basically an error made due to the carelessness of reporters who already filled in information before actually receiving the report:

I can explain this with some authority: the four-word phrase “the next five years” was indeed not included in the report, but was added by our reporter[s] by mistake. Why did they add this by mistake? It’s funny, because in order to win some time, they dismantled the report’s key points and made a template in advance that “in the next five years” such and such will be done, putting it in paragraph by paragraph, and also putting in “insist on normalized epidemic prevention and control” without even thinking about it. This is indeed an operational error at the media level, and if you say that our people lack professionalism, I get it, but I just hope that people will stop magnifying this mistake by passing on the wrong information.”

Global Times commentator Hu Xijin (@胡锡进), who used to be the editor-in-chief and party secretary of the state media outlet, also weighed in on the incident in a social media post on Monday. He started his post by saying that the reporter who initially made the phrase ‘next five year’ go viral had a “lack of professionalism” which caused the overall misunderstanding.

Hu also added a photo of the relevant page within the original report that was delivered at the Congress, showing that the phrase ‘the coming five years’ was indeed not written before the segment on China’s battle against Covid, which detailed Beijing’s commitment to its strict epidemic prevention and control measures.

But Hu also added some nuance to the confusion and how it came about. The original report indeed generally focuses on Beijing developments of the past five years and the next five years, but adding the “in the next five years” phrase right before the segment was a confusing emphasis only added by the reporter, changing the meaning of the text.

Hu noted that the right way to interpret the report’s segment about China’s Covid battle is that it clarifies that the battle against the virus is not over and that China will continue to fight Covid – but that does not mean that Beijing will stick to its current zero Covid policy for the next five years to come, including its local lockdowns and restrictions on movement.

Hu Xijin wrote:

I really do not believe that the city of Beijing would allow the situation as it has been for the past two months or so go on for another five years. That would be unbearable for the people of Beijing, it would be too much for the city’s economy, and it would have a negative impact on the whole country. So it’s unlikely that Beijing would come up with such a negative plan now, and I’m convinced that those in charge of managing the city will plan and strive to achieve a more morale-boosting five years ahead.”

After the apparent error was set straight, netizens reflected on the online panic and confusion that had erupted over just four words. Some said that the general panic showed how sensitive and nervous people had become in times of Covid. Others were certain that the term “next five years” would be banned from Weibo. Many just said that they still needed time to recover from the shock they felt.

“The peoples’ reactions today really show how fed up everyone is with the ‘disease prevention’ – if you want to know what the people think, this is what they think,” one Weibo user from Beijing wrote.

To read more about Covid-19 in China, check our articles here.

By Manya Koetse
With contributions by Miranda Barnes

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China and Covid19

The Curious Case of the Henan Bank Depositors and the Changing Health QR Codes

“It must be American hackers who did this, right?”, some Weibo commenters wrote in light of the miraculously changing Health Codes.

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Where can people turn to once their money seems to have gone up in flames? How could Health Codes randomly turn from green to red? And who will stand up for justice? These are the questions asked by Chinese netizens in the Henan bank depositors case that is making headlines this week.

This week, the story of a Henan banking scandal and depositors’ Health Codes suddenly turning red triggered online discussions in China and even made international headlines.

In between online deposit products, financial platforms, regional banks, and Health Code systems, the story is a bit messy. Here, we’ll explain the story and its latest developments.

 

DUPED DEPOSITORS

 

The story starts in April of this year when people discovered that they were unable to withdraw money they had invested in online deposit products offered by various smaller regional banks.

Some people had deposited money via the Baidu money app (Du Xiaoman Financial 度小满), others had used another third-party platform, intermediaries, or one of the mini-programs run by the banks themselves.

By early May, it had become clear that dozens of depositors who once thought they had invested their money wisely had actually been duped. Four of the banks involved are located in Henan province, namely: the Yuzhou Xinminsheng Village Bank (禹州新民生村镇银行), Shangcai Huimin County Bank (上蔡惠民村镇银行), Zhecheng Huanghuai Community Bank (柘城黄淮村镇银行), and the Kaifeng New Oriental Country Bank (开封新东方村镇银行).

But there are also other smaller banks involved, including Guzhen Xinhuaihe Rural Bank (固镇新淮河村镇银行) and Yixian Xinhuaihe Rural Bank (黟县新淮河村镇银行) in Anhui.

As reported by South China Morning Post by late May, multiple customers had confirmed that they had not been able to withdraw funds either online or in person.

The sudden apparent closure of their withdrawal channels set off a wave of panic among depositors, who then protested in the provincial capital of Zhengzhou on May 23rd, demanding the return of their money.

Yang Huajun (杨华军), deputy director of the Henan branch of China’s Banking and Insurance Regulatory Commission (CBIRC), arrived at the scene of the protests and – speaking through a megaphone – promised the demonstrators that as long as their funds were “legally” deposited, they would be protected by law.

Many depositers, however, were unsure of whether or not their deposits were actually made in a “legal” way and what the definition of “legal” entailed in this case.

Over the past years, Chinese smaller rural banks have partnered with online platforms, often offering relatively high returns, in order to boost their deposit-reliant funding base.

In December of 2020, platforms Alipay, Du Xiaoman Financial, JD.com and Tencent Wealth Management all suspended the sale of online deposit products via their financial apps in light of heightened scrutiny from regulators concerning funds raised by unstable smaller lenders.

The smaller banks that are now at the center of the recent financial scandal then (illegally) reached out to their existing customers directly after December 2020 and convinced them to download the banks’ apps in order to deposit even more money.

One of the persons duped is Mr. Sun from Shenzhen. As reported by Sina Finance, it was in 2020 when Sun came across a seemingly attractive online saving product via the Du Xiaoman Financial app. Although Sun was not familiar with the banks in question, namely the Yuzhou Xinminsheng Village Bank and Shangcai Huimin County Bank, he could not resist the deposit interest rate of 4.6%, which was much better than what the big banks were offering at the time.

In early 2021, Mr. Sun received a text message from Yuzhou Xinminsheng Village Bank saying that although the financial products had been taken offline, users would still be able to deposit through the bank’s own online application. Mr. Sun ended up depositing his entire savings into the Henan-based rural bank, thousands of miles away from his own home.

And then, earlier this year, Sun came across the news that Henan New Wealth Group, the primary shareholder of all banks involved, was under investigation for fraudulous practices. When he opened up his online financial application, there was nothing to see but a notice that the system was under maintenance. Sun could no longer access his funds. Hundreds of other customers were seeing the same empty screens.

According to media reports, the current suspected scam case affects some 400,000 customers of seven local banks and involves a money sum of 40 billion yuan ($5,6 billion).

 

IN THE RED

 

As thousands of depositors have been fighting to recover their savings over the past two months, they were duped a second time earlier this week. Dozens of affected depositors claimed they had seen their Health Codes turn red without any logical reason on June 13 or June 14 – the day of a planned protest.

In China’s Covid era, the Health Code system has become a pivotal tool in the country’s battle to contain the spread of the virus. The Health Code system is embedded in various apps, most importantly in Wechat and Alipay, and uses various data to assess an individual’s exposure risk. There is not one unified national Health Code application; they are developed by different actors and their management is different across Chinese provinces and cities.

If there is no detected risk, an individual is assigned a Green QR Code and is allowed access into any venue or location where a QR code scan is mandatory. With a Yellow Code, you should stay home for a week, and Red Code means you are high risk and need to quarantine for 14 days – this severely limits your freedom to move around and travel.

On June 13th, many affected investors saw their Health Code turn red when arriving in Zhengzhou, where they were allegedly coming to retrieve their savings and protest the injustice they suffered. The QR code color change was unexpected and strange, considering that there were no new reported Covid cases in their vicinity and also considering the fact that accompanying family members who made the exact same journey did not see their Health Codes change.

This raised suspicions that the duped depositors were specifically targeted, and that their Health Codes were being manipulated by authorities.

CNN reported that many distributors who had come to Zhengzhou were taken to a guarded quarantine hotel before being sent back to their hometowns via train the next day. According to a Chinese media report by Nanfang Daily, the depositors were not even asked to do nucleic acid testing and were told by local staff that they would get their Green Code back as soon as they left Henan.

Various media report that minimally 200 depositors saw their Health Code change from Green to Red earlier this week.

 

“OPERATION CODE RED”

 

The curious case of the Henan depositors scandal and the changing Health Code colors has become a trending topic on Chinese social media this week.

The topic of the duped depositors was also discussed online before this week, and it brought back memories of earlier financial scandals, such as the P2P chaos that occurred back in 2018.

But the topic of depositors’ Health Codes changing to Red is something that attracted much wider discussions on the apparent abuse of a system that has now become a part of everyday life for people in China’s Covid era.

The main proof for people that the Henan depositors were targeted in this apparent “Operation Code Red” is that, as mentioned before, the family members that were traveling together with the duped depositors never saw a change in their Health Code: those people who were listed on the affected regional banks’ depositors list were seemingly singled out and purposely targeted.

“Who is in charge of changing the Health Code colors?” became a much-asked question on Weibo, with many blaming local Henan authorities for abusing their powers to try and stop protesters from raising their voices in Zhengzhou. One Weibo post on this issue received over 1,6 million views. Meanwhile, Henan authorities still said they did “not understand” what had happened.

“It must be American hackers who did this, right?”, some Weibo commenters wrote, putting in a sarcastically smiling emoji, with others adding: “No, the aliens did this – it must have been the aliens!”

Others wrote that the situation at hand should be simple to figure out: “There is no way that this is an oversight or a data error. If you want to know who did this, look at who or which department has the authority to manage both epidemic prevention measures as well as finance affairs.”

Many comments also showed a sense of disillusionment with how China’s Covid management affects the people: “After seeing the chaos during the Shanghai lockdown, this does not even surprise me anymore,” one person wrote on Weibo: “All we can do is pray that it won’t happen to us.”

“Why is Henan’s “messy Red Code” incident so extremely vile and scary? Because once a person or institution holding public power looks at you in a bad light, they can give you a Red Code and take you away, in the name of legality. This is the evil that comes from unmonitored power,” one blogger from Anhui wrote.

Other people also worried about foreign media reporting on this issue, saying this incident is being used to cast China in a bad light while local authorities are to blame: “We should unify the Health Code system into a national system in order to avoid this from happening again.”

According to Chinese state media reports, the case has now been forwarded to the Health Commission of Henan Province for further investigation.

We will keep tracking upcoming developments. Meanwhile, check out our other reports on trending topics relating to China’s banking and finance here. For more about Covid-related trending topics, check here.

By Manya Koetse
With contributions by Miranda Barnes

Image via Weibo

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References (all other sources included in hyperlinks)

Lee, Amanda. 2022. “Rural Banks Freeze Customers’ Accounts.” South China Morning Post, May 31.

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