China will slow its massive lending spree and step up monitoring of banks as it tries to prevent speculative bubbles in real estate and other assets while keeping the country’s economic recovery on track, a top regulator said yesterday.
China’s banking system is healthy despite last year’s explosive growth in credit and regulators could manage the risks, said Liu Mingkang (劉明康), chairman of the Chinese Banking Regulatory Commission.
“We are confident that risks envisaged could be well absorbed,” Liu said at a financial forum in Hong Kong.
PHOTO: REUTERS
Record bank lending last year to support government spending on infrastructure and other projects under Beijing’s stimulus package has led to fears of asset bubbles and huge bank losses if too many loans turn sour.
After handing out some 9.5 trillion yuan (US$1.39 trillion) in loans last year, banks were expected to scale back lending to roughly 7.5 trillion yuan this year, Liu said.
This year, the total amount of loans will grow by as much as 18 percent year on year, compared with nearly 32 percent last year, he said.
“This year, we will continue to control the pace and demand of the credit supply,” he said. “We shall control, and we have controlled, the credit growth the whole year round.”
Already, “corrective actions” have been taken against banks that lent too much or made bad loans to root out “excessive” exposure, consumer credit card risks and other problems, he said.
Regulators were paying special attention to loans for local government projects and real estate. All banks have been ordered to “heighten their vigilance against an impossible, embedded credit risk,” Liu said.
New leverage and liquidity restrictions would be imposed, he said.
Meanwhile, IMF managing director Dominique Strauss-Kahn reiterated yesterday his call for China to boost the value of its currency, the yuan, as critics accuse Beijing of keeping the unit artificially low to boost exports.
Strauss-Kahn played down fears about an asset bubble forming in China and the wider region, a growing worry as regional property prices surge, but Asian countries should usher in temporary capital controls as a response to the massive amount of foreign money flowing into their economies, he told the Asian Financial Forum in Hong Kong.
The region must also look at boosting domestic demand to cut its reliance on foreign consumers, especially in the hard-hit US, he said.
FIVE-YEAR WINDOW? A defense institute CEO said a timeline for a potential Chinese invasion was based on expected ‘tough measures’ when Xi Jinping seeks a new term Most Taiwanese are willing to defend the nation against a Chinese attack, but the majority believe Beijing is unlikely to invade within the next five years, a poll showed yesterday. The poll carried out last month was commissioned by the Institute for National Defense and Security Research, a Taipei-based think tank, and released ahead of Double Ten National Day today, when President William Lai (賴清德) is to deliver a speech. China maintains a near-daily military presence around Taiwan and has held three rounds of war games in the past two years. CIA Director William Burns last year said that Chinese President Xi Jinping
President William Lai (賴清德) yesterday said that China has “no right to represent Taiwan,” but stressed that the nation was willing to work with Beijing on issues of mutual interest. “The Republic of China has already put down roots in Taiwan, Penghu, Kinmen and Matsu,” Lai said in his first Double Ten National Day address outside the Presidential Office Building in Taipei. “And the Republic of China and the People’s Republic of China [PRC] are not subordinate to each other.” “The People’s Republic of China has no right to represent Taiwan,” he said at the event marking the 113th National Day of
REACTION TO LAI: A former US official said William Lai took a step toward stability with his National Day speech and the question was how Beijing would respond US Secretary of State Antony Blinken yesterday warned China against taking any “provocative” action on Taiwan after Beijing’s reaction to President William Lai’s (賴清德) speech on Double Ten National Day on Thursday. Blinken, speaking in Laos after an ASEAN East Asia Summit, called the speech by Lai, in which he vowed to “resist annexation,” a “regular exercise.” “China should not use it in any fashion as a pretext for provocative actions,” Blinken told reporters. “On the contrary, we want to reinforce — and many other countries want to reinforce — the imperative of preserving the status quo, and neither party taking any
SPEECH IMPEDIMENT? The state department said that using routine celebrations or public remarks as a pretext for provocation would undermine peace and stability Beijing’s expected use of President William Lai’s (賴清德) Double Ten National Day speech today as a pretext for provocative measures would undermine peace and stability, the US Department of State said on Tuesday. Taiwanese officials have said that China is likely to launch military drills near Taiwan in response to Lai’s speech as a pretext to pressure the nation to accept its sovereignty claims. A state department spokesperson said it could not speculate on what China would or would not do. “However, it is worth emphasizing that using routine annual celebrations or public remarks as a pretext or excuse for provocative or coercive
RSS