China’s Crisis Is Escalating—From Hospitals to Banks to Society

Let me start with something fundamental, a sector that touches every family, health care. Because if there's one sector that should be stable, one sector that should always have demand, it's hospitals. People get sick regardless of the economy. Viruses don't care about GDP. And in recent years, China has gone through multiple waves of public health crisis. More patients, more demand, more revenue. So logically, hospitals should be doing okay. But that's not what's happening. Instead, we're seeing something that doesn't make sense. In recent years, major top-tier hospitals, in Chinese they call Sanjia Yiyuan, across the country have been overwhelmed with waves of outbreaks, infections, and diseases. Yet at the same time, that medical sources or medical resources are under intense pressure. A large number of small and mid-sized hospitals are going bankrupt and shutting down, including public hospitals. And that contradiction is now becoming impossible to ignore. Let me give you some numbers. According to data from China Hospital Association, or the China Hospital Association, in 2024, private hospitals were closing at an average rate of 1.4 hospitals per day, with an average loss of 5.53 million yuan per hospital. Then in 2025, the situation escalated. In just the first half of the year, roughly six months, 1,247 private hospitals shut down. That works out to be about seven hospital closures per day, not per month, per day. And this wave didn't spare the so-called star hospitals, the ones backed by tens of billions in investment. And one particular striking case is Lu Xinan Hospital in Shandong. This was a massive project with an investment of 2 billion yuan. After declaring bankruptcy, it left behind a 1.26 billion yuan in debt. And 600 employees who had not been paid for eight months, eight months in a hospital, not being paid. And this is where things across the sector or the healthcare sector is sending an alarm bell. It has crossed an important line, because this is no longer just a private sector problem. The crisis is also spreading to the public system. Reports of unpaid wages are increasingly emerging from public hospitals across multiple regions. So what's driving all of this? What's the internal logic behind a system where hospitals are full but still collapsing? A doctor surnamed Zhang from Heilongjiang offers an explanation in an interview. He points out that during the three years of COVID lockdowns, the medical insurance fund was effectively drained. As reimbursements declined, hospital revenues were gutted. And that leads to a vicious cycle. Large hospitals in major cities are overwhelmed with patients, but they are losing money on each one because insurance no longer covers the full cost. At the same time, hospitals in smaller cities and rural areas are shutting down because of population decline. There aren't just enough patients to sustain them. So on one side, you have overcrowding. On the other, you have closures. Both sides are losing money at the same time. If the collapse of the healthcare system we just discussed represents the breakdown of the social safety net, then what's happening in the financial sector strikes at the very heart of the social contract. Lately, the topic of difficulty in withdrawing money, or in Chinese we say qu qian nan, has been exploding on social media. People are just having difficulties to withdraw money from banks. One story that went viral involved a lawyer in Shandong who simply tried to withdraw 40,000 yuan in cash. And that was about what? About 32,000 US dollars. He was interrogated, forced to provide multiple layers of documentation, and treated like a suspect. And this isn't just one bad bank teller. Across the country, commercial banks are now using the so-called National Anti-Fraud Center requirements as a universal shield to restrict access to people's own money. You want to open a debit card? You need to provide proof of employment. You want to transfer money? You have to explain your relationship to the recipient. You want to withdraw money? You must report exactly how you plan to use it. Of course, the banks aren't interested in any of this information. They're just trying to make it more difficult for you to take out money. It has become a de facto asset audit. But as serious as difficulty in withdrawals are, something even more alarming is happening. Deposits are simply disappearing. And then there is a case in Henan, Xinjiang. A woman there reported that her 800,000 yuan deposit at a local ICBC branch had been taken without her consent and loaned to a real estate developer chasing high returns. The developer collapsed. The bank now refuses to repay her. And there is video footage of her crying on the bank floor. But no one is really helping her. And then just this week, in April, maybe last week, a week ago, there's another situation in Tangshan, Hebei. A case involving the Agricultural Bank of China drew national attention. A woman deposited 29 million renminbi into a so-called regulatory account for a land auction transaction. Now, before the deposit, she even confirmed with the bank manager personally to ensure security. One week later, the balance was zero. The bank president refused to appear to address her grievances. The manager claimed that he had been tricked. And when the victim tried to post evidence online, her content was quickly deleted. At this point, it's no longer convincing to call these isolated incidents. What we're seeing is a broader breakdown of financial trust. So why is this happening? Because banks are under pressure. Banks are losing money. Their revenues are shrinking. With interest so low and bad debt ratio so high, the banks are losing money. And in that environment, some institutions begin looking for ways to stay afloat, including using depositors' funds as temporary liquidity patches to cover fiscal gaps. And this is the turning point. We are entering a phase where access to your own money is no longer guaranteed. Well, when liquidity from healthcare and finance is no longer enough, pressure begins to shift toward other parts of society, including one of the last remaining asset pools. Guess what that is? The religious sector. In recent weeks, there have been reports of large-scale administrative actions targeting major religious sites. The scenes are striking. Armed vehicles have blocked temple entrances. Security personnel station inside sacred spaces. Some sites have effectively been placed under military-style management. So what's happening? Well, according to internal sources, this broader campaign is expected to continue through at least 2027. It involves coordination across multiple government agencies, including the Central Propaganda Department, the Ministry of Public Security, and the National Religious Affairs and Administration. What's driving this? Some people say it's the fear. As the living environment is becoming harsher and more difficult, people have turned to temples for spiritual support. And that's a big fear. That's a no-no in a communist state, because communism is supposedly your faith, your religion. So that's one reason. But then there's another level. It's fiscal pressure. The religious sector has always been tightly controlled by the state. China doesn't have religious freedom, so these temples are really not places of worship. Their government assets function as tourist attractions for commercial reasons. And they're highly profitable, because there's no cost. Now, in economic downturn, many Chinese go to temples to pray, and they leave large donation money. And in many cases, revenues that once stayed within temple systems, such as donations and tourism income, are now being redirected into broader state-controlled channels. There are also claims that some of these funds may be used to support government expenditures, including areas linked to security and national defense, or I should say PLA. What's clear is this. The temples of China have become ATMs for the CCP in a state of fiscal distress. Through military suppression and asset liquidation, the state has completed its final plunder of the religious realm. It reveals the underlying logic of a regime that will stop at nothing to extract every last resource for its own survival. At the same time, wages are falling. Now, in provinces like Shaanxi and Yunnan, in county-level areas, jobs such as preschool interns or hotel receptionists now pay 800 to 1,000 yuan per month. That's between 140 to 160 dollars a month. That's barely enough to live or to eat. Many people describe this as going back 30 years. This is the kind of salary people made 30 years ago. And even having a job is no longer a guarantee that you'll be paid. Now, there's a case that got national attention a little while ago during the Lunar New Year period. More than 300 employees at a company, what's the name of that company? I think it's called Beijing Rui An Technology. They attempted to defend their rights and demand unpaid wages for the past two years. They were not paid for two years, but they were met with threats from the company, specifically threats to suspend their social security payments. Now, a public WeChat account reported on the case, but the article was quickly deleted. So according to that report, Rui An Technology had been withholding wages for 24 consecutive months, with total unpaid wages exceeding 80 million yuan. Now, why this story matters so much is this company is not just any company. It has been around for more than two decades, and it's jointly owned by the Ministry of Public Security. And this is why the story becomes so telling. This company, Rui An Technology, was founded or jointly owned by the Third Research Institute of the Ministry of Public Security, and another SOE, the Aerospace Industrial Development Company, which is a state-owned, publicly listed entity on the Shenzhen Stock Exchange. Rui An provides big data and information solutions to a wide range of government and institutional clients, including public security agencies, cybersecurity and internet administration agencies, CCP's court system, China's power companies and telecom operators, the military, and emergency management agencies. In short, this is a company created by the state and working for the state. And it's not in some remote third-tier city, it is in Beijing. And yet even there, workers are going unpaid for two years. That tells you China's fiscal stress. And that kind of environment creates something deeper than just economic pressure. It creates insecurity. And that insecurity is now shaping behavior and mindset. I'm going to tell you something that just happened, and it's really strange. Now, in April, a scandal broke again also in Guangdong, in a place called Yangjiang. In Yangjiang, they discovered a scandal. What it was was that 12 people paid a total of 300,000 yuan or $45,000 in middleman fees just to secure jobs as high-speed rail security inspectors. Think about that. Up to 45,000 yuan or $6,500 per person. That's the most that they paid. Some people paid less. Some people paid 25,000 yuan, which is about $4,000. But the highest was 45,000 yuan or $6,500 for a job that pays 2,500 yuan a month and requires 16-hour shifts. 2,500 yuan is like a little over $300 a month. What people are doing is they paid a one-year salary as a bribe to get a job that pays less monthly. But it reflects a deeper fear. In some of the best-paid industries, such as high-tech and finance, there is a so-called 35-year-old rule. What it says is that companies only hire people under 35. If you're over 35, no, they'll pass. Many people would rather sacrifice their savings for something that looks stable, a government job, than face the uncertainty of the open job market. A high-speed rail station security inspector is a government job. It doesn't pay well. It pays 2,500 yuan a month, but it's long-term, and the job is easy. That's why people are willing to pay 40,000 yuan, more than one year of their salary, to get a job that pays 2,500 yuan a month, because they're in for the long term. And for those at the very bottom, even that option doesn't exist. So this downward spiral is creating a growing and largely invisible population of the displaced. According to China's own National Bureau of Data, as of August last year, there were approximately 47.5 million homeless people in China. I know that number does not resonate, but what that number means is that's a five-fold increase since the year 2020. So within five years, the number of homeless in China grew five times, and this is according to the official data. And 61% of them, 61% of the homeless people are under the age of 33. So the face of homelessness in China is getting younger, and you can see it on the ground. In places like Majuqiao, a well-known labor hub in Beijing, long lines form every day for five yuan boxed meals, meals that cost them five yuan. That's about 70 cents. Two vegetables and rice, that's it. So for many unemployed workers and recent graduates, that isn't a choice. That's their only option. So from 800 yuan monthly wages in smaller cities to five yuan meals in Beijing, the idea of upward mobility is gone. This is no longer just an economic slowdown, it's the closing of the door for an entire country.