Do you often see situations where Chinese banks make things difficult for depositors?

If you look at it from another angle, it becomes clearer: from the perspective of 68 trillion in debt, just the interest alone consumes more than 3 trillion yuan every year, far exceeding the annual fiscal revenue of multiple provinces. So-called “debt restructuring” has never been about truly repaying the principal; it’s a shell game of moving problems around—swapping high-interest old debt for new debt with low interest of about 1.5%. The principal remains unchanged: it only pushes out the repayment pressure and temporarily eliminates the most troublesome issue of high interest.

Local government financing vehicles (chengtou)—relying on the cycle of borrowing new to repay old—can avoid repaying the principal as long as the game doesn’t collapse. Ultimately, they count on long-term inflation to quietly dilute the debt and shift the burden onto ordinary people.

As state-owned big banks, the “sons,” they have no choice but to step up. They pool the low-cost deposits of depositors—about 0.2% to 1%—and use it to buy these low-interest chengtou bonds. On the surface, they earn a thin net interest margin, but in reality that net interest margin is already approaching the warning line. They deceive themselves through adjusting provisions for bad debts and moving items off the balance sheet.

In the end, ordinary depositors are the ones paying the bill. Your hard-earned savings are taken by the banks to subsidize chengtou, and the 1% interest can’t beat real inflation. Your purchasing power keeps shrinking, yet you’re still made to believe you’re earning “safe” interest.

Meanwhile, the stock market is kept under precise control, and the housing market is tightly managed in a half-dead state—so as to prevent capital outflows and ensure banks have enough deposits to support this largest-scale debt-restructuring game in history.

On the surface, everyone is pleased. But behind the scenes, all costs are quietly shifted onto ordinary people.