Even were the state to completely control investment, as it did in the Soviet Union, the problem would still emerge. This is where part of the crunch is coming from. Millions of Chinese have lost their savings but have yet to find out. Banks have been instructed to give these savings to companies. I do mean give because they never had any possibility of repaying the loans.
Government officials can claim they can overcome the problem by recapitalising the banks.
This is code for printing money, which means inflation. On the other hand, deposits could be frozen until banks raised sufficient funds from profitable investments. There is no telling how long this would take. There is also the remote possibility that sufficient funds are available to meet above normal withdrawals without putting too much strain on the system. Nevertheless, should panic set in the government will have to close the banks' doors, if only to prevent a secondary deflation from being triggered.