Latest News:  
Beijing   Foggy/Cloudy    20 / 11   City Forecast

Home>>China Business

Property loan risks controllable: CBRC chief

(China Daily)

09:16, October 20, 2011

BEIJING - Results of a recent stress test show that commercial lenders in China can take as much as a 40 percent decline in property prices, and the general risk in property loans is controllable, said the top banking regulator Liu Mingkang on Wednesday.

By the end of August, outstanding property loans among Chinese commercial lenders stood at 10.4 trillion yuan ($1.63 trillion), 19.8 percent of the total of outstanding loans. "The proportion is far less than that of many European countries and America," said Liu, the chairman of the China Banking Regulatory Commission (CBRC).

He said limited and relatively simple securitized products among lenders in China and the 189 percent coverage of collateral to loans made to property developers all point to the conclusion that the total risk in property lending is controllable.

In addition, non-performing loans among banks, including rural mutual cooperatives, related to the property market are still less than 2 percent, and are declining in some regions, Liu said.

To curb increasing risks as the government cools the property market, the CBRC told lenders in July not to extend the maturity of loans to developers, not to grant new credit to help developers repay maturing debt and to set significantly higher standards on loans for commercial than residential properties, Bloomberg reported.

Liu had previously told China Central Television in July that banks can withstand as much as a 50 percent drop in property prices.

China's housing market started correcting, but Beijing probably wants to see more, said Yao Wei, China economist at French bank Societe Generale SA.

【1】 【2】


Leave your comment0 comments

  1. Name


Selections for you

  1. College arts on exhibition in east China

  2. Specimen of legendary elephant in Taipei

  3. Three Gorges Dam water level reaches 174.18m

  4. Violence greets new Greek efforts to cut public spending

Most Popular


  1. Chinese culture of peace promotes development
  2. Red flags raised as Japan mulls repeal of arms ban
  3. Job death shows Americans' love of big business
  4. Wall Street leads the West to a world of chaos
  5. Are China's forex reserves too big?
  6. Signs of higher mortgage rates
  7. Taobao Mall suffers from growing pains
  8. Is investing in forex cost effective?
  9. China needs cultural power
  10. Small vendors' wrath

What's happening in China

Themed restaurants attract many curious customers

  1. Farmer sold as slave to factory 'over complaint'
  2. School in NW China halts use of green kerchiefs
  3. Overuse of antibiotics concerns officials
  4. Survey shows people lack trust in each other
  5. Future bright for problem solvers in Party

PD Online Data

  1. Dragon Boat Festival and Qu Yuan
  2. Hanging Pictures of Zhong Kui
  3. Fragrant bag
  4. Dragon boat racing
  5. Zongzi in Dragon Boat Festival