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The Enping financial crisis occurred in Enping, Jiangmen, GuangdonginChina. This financial crisis refers to the localized financial risk events that occurred in Enping in the 1990s, and at the height of the situation, there were two serious bank runs in June 1995 and August 1996,[1] which at one time led to financial paralysis in the entire province of Guangdong.[2]
In the early stage of Chinese economic reform, Guangdong Province, as the frontier of opening up, had once experienced rapid economic development. The State Council introduced many preferential policies for Guangdong's economic development, but this also led to the unorganized development of finance in Guangdong, and a large number of debt crises and financial incidents began to appear.[3]In 1990s, Guangdong Province experienced problems of economic overheating and bubble expansion.The high-speed flow of capital was accompanied by the phenomenon of a large number of loans being repaid by borrowing,[4] meanwhile the incidence of financial crimes had also increased.[5]
Beginning in 1992, mainland China began to be keen on building development zones, investing in real estate, investing in stocks and capital-raising, and, in terms of economic indicators, was keen on raising fixed-asset investment, increasing credit investment, increasing currency issuance and stimulating inflation, while the phenomena of indiscriminate capital-raising, indiscriminate borrowing and indiscriminate establishment of financial institutions appeared in the economic order.[6]
Losses incurred by the scandal cost the People's Bank of China (PBOC) RMB 6.8b.[10] As banks pulled out of Enping, residents were denied access to financial services into the early 2010s.[11][12]
