Fears of data abuse as Chinese health code turns red for financial scandal protesters

·6-min read

Victims of what could be one of China’s largest financial scandals found themselves unable to step outside to join planned protests because their health QR codes had turned red, reigniting fears that the large-scale data collected for contact tracing would be abused for other uses.

Since late May, hundreds of people have taken to the streets in China’s central Henan province, calling for authorities to ensure the return of their deposits that were frozen in four rural banks in the province.

The deposits at Yuzhou Xinminsheng Village Bank, Shangcai Huimin County Bank, Zhecheng Huanghuai Community Bank and New Oriental Country Bank of Kaifeng have been frozen since April 18, amid rising risk of recession for the world’s second-largest economy.

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The People’s Bank of China (PBOC) said in a statement in April it had launched investigations into the four banks.

Chinese regulators have not confirmed the amount of money that has been frozen, but depositors who have formed groups on various social media platforms to air their grievances claim the figure totals tens of billions of yuan.

Local media quoted the China Banking and Insurance Regulatory Commission (CBIRC) last month as saying a probe had found that Henan Xincaifu Group Investment Holding, a private investment firm with stakes in all four lenders, colluded with bank employees to illicitly attract public funds via online platforms, resulting in the deposits being frozen.

Zhang, who owns a small factory in Jiaxing, Zhejiang province, had planned to travel to the Henan capital Zhengzhou to protest on Monday. On Saturday, he found his Zhengzhou health code – which is used to indicate Covid-19 exposure status – had turned red. At that point, he had not yet stepped outside the city and he returned a negative nucleic acid test result on Saturday.

He decided to go anyway. Upon arriving at Zhengzhou railway station on Monday, he scanned the local health code, and again it showed red. He was immediately taken by local police to a university library, joining about 10 other bank deposit holders.

“The police asked some staff from the CBIRC to talk to us, and they tried to persuade us to go back, but none of us would when the matters weren’t resolved,” Zhang said.

In the end, he was escorted home by police.

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An operator for Zhengzhou’s government service hotline did not address questions about protesters’ health codes turning red, but said that those with red health codes could try to change their status by following various prevention rules such as getting tested.

China’s health code, which indicates a person’s Covid-19 status via an app requiring real-name registration, follows a traffic-light system, with green declaring a person has not been exposed to potential cases or risky areas, while yellow and red codes ban the person from entering most venues or public transport.

Previously, there has been criticism that the health code was a mass surveillance tool that could be abused by authorities.

A lawyer, who asked to remain anonymous, said that if the local government did use the health code to control protesters’ movements it would have been guilty of multiple violations.

“The purpose of collecting personal information should be to prevent and control the epidemic,” the lawyer said.

By assigning red codes to Henan rural bank depositors, authorities must have obtained their personal information, he added. “This data collection process is illegal … no doubt it is an abuse of power.”

Zhang is one of many whose life’s savings were frozen in Henan rural banks. In 2020, he gradually put 3.3 million yuan (US$489,810) – about half his assets – in four banks through a financial management app owned by search giant Baidu.

In April, he found he could not log in to the banks online. When he read news reports, he started calling regulatory offices and in May went to Zhengzhou to protest for the first time.

Even people who had not planned to go to the protest and are not physically in Henan have been affected. One man in Changzhou, Hebei province, said his health code turned red while he was sitting at home.

He called government offices for three days and the code returned to green on Tuesday, just as Chinese media reports started circulating about bank customers being hit with unexpected red health codes.

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A Shanghai man surnamed Zeng who had deposits at one of the Henan banks said he had not left the financial hub, but his health code system indicated that his health risk level under the Henan province system was high.

“The red health code in Henan is like a ‘deposit code’ now,” Zeng said.

Yet, his local health code in Shanghai was still green, and no staff at the epidemic prevention department called him because of his red health code.

“Luckily, my life has not been affected,” he said.

Another man surnamed Yuan, from Shenzhen, also said his code turned red on Saturday even though he had not left Shenzhen recently.

He has 350,000 yuan (US$52,000) at two of the rural Henan banks. When Yuan contacted his local government, he was told that Henan province had issued him with a red code, which was synchronised to the national government affairs platform, restricting his movements – even in Shenzhen.

He was unable to enter public places or take public transport until Tuesday morning, when he received a call from the Henan epidemic prevention and control department telling him that his health code had been turned green again.

Those affected by the bank deposit freeze told the South China Morning Post they planned to keep protesting, even as it seemed they were running out of options.

“These are all my assets,” the man in Hebei province said. “I worked for 20 years to save up 2 million yuan … If I can’t get this money back, I can’t live.”

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