Public outcry following alleged COVID health code violation in Zhengzhou

Public outrage has broken out after local authorities at China’s manufacturing hub in Henan province were alleged to have abused their control over the COVID health code to avoid protests from savers whose billions of dollars’ worth of investment at several local banks “disappeared” amid potentially one of the largest financial scams in China. It is not yet clear if this money will be repaid as the investigation is still ongoing.

The “rare” protest ensued after the bank accounts of those investors were frozen by four local banks and online money withdrawal services were suspended without warning, prompting public panic. It is reported that deposit products were offered by these institutions in collaboration with several online third-party finance platforms including Du Xiaoman Financial, a fintech arm under the Chinese Internet firm Baidu that provides short-term loans and investments, Tianxing Finance backed by the electronic manufacturer Xiaomi and a financial institution controlled by the state-owned China Life Insurance Company.

Hundreds of investors took to the offices of the local China Banking and Insurance Regulatory Commission (CBIRC) in Henan’s capital city of Zhengzhou and demanded the return of their money in May. Whilst those who turned up on site were dispersed by police, several savers who had attempted to negotiate money withdrawals with relevant departments reported on 13 June that their COVID health codes were changed to red despite their negative COVID test results. Under the traffic light coloured system, a red code indicates a confirmed COVID case and requires quarantine, therefore, restricting the code holder’s travelling abilities and visits to public places.

Adding to the mystery were several others who didn’t have any recent travel history or plans to visit Zhengzhou but also discovered the same change to their health codes, and they are also investors at the local banks. One of the depositors surnamed Zhang told the Chinese media outlet 21st Century Business Herald that his red codes “magically” turned back to green when he agreed to return home following persuasion by staff members of the local CBIRC on 14 June.

While the cloud has yet to be lifted, several property buyers in Zhengzhou reported having encountered the same issue a few days after having initial conversations with developers regarding delayed delivery. As the episode continues to ferment, the local government hotline 12345 responded to the media on 15 June, attributing the incident to a glitch in its data library, which the authority has been actively seeking to improve”.

However, the explanation has not appeased the public with many accusing this coloured-system as having become a bureaucratic tool for authorities to manipulate the public, whilst others are calling for a “unified” health code supervised by the central government, which would also help address the issue of inconsistency in the health code rules. Under the current COVID health code system, test and quarantine rules vary in different regions, which has resulted in confusion and inconvenience for those travelling across cities and provinces.

The problem has been raised by Cai Weiping, a member of the National People’s Congress, who suggested cancelling the local health code system and calling for the introduction and standardisation of a “well-designed” COVID code mechanism that would better safeguard personal information. Cai also acknowledged that “the weight of the health code on COVID regulations should be reduced in the short term and shouldn’t be used as the only ticket for the public to have their freedom or could even open up opportunities to abuse power, otherwise, the whole system will go sour.”


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