CBRC: Crackdown on property speculation

The Bank Watchdog has repeated its commitment to ensuring that appropriate amounts of credit will be channeled to different parts of the real estate sector. President of the China Banking Regulatory Commission, Liu Mingkang, says the aim is to weed out speculation and stabilize prices.

President of the China Banking Regulatory Commission, Liu Mingkang.

Liu Mingkang said banks will not provide loans for property developers who intend to use the money to speculate on the market. He says efforts will focus on preventing dramatic fluctuations in house prices.

Liu said, "Real estate has become a highly speculative industry. This is not something we can ignore, and we want to exercise more prudence when granting loans. Credit supply should match moves to restructure industries and the needs of ordinary people."

But Liu Mingkang also stressed how much the property market drives the overall economy, and that the CBRC would do all it could to boost healthy development of that sector.

Liu also said, "The real estate sector is important to the economy. The banking sector should support development of the property market."

Liu Mingkang also commented on an improvement in non-performing loans. He said the bad debt ratio at Chinese banks dropped to 1.58 percent last year. While the volume of non-performing loans fell below 500 billion yuan for the first time in history.