Banks downplay inflation concerns

Many Chinese banks have remained unwavering on their loan policies during the second apartment. They have also dismissed inflation concerns amid supply exceeding demand.

China tightened loan policies during the second apartments in the second half. But banks insist it is business as usual.

Xia Jinhai, Personal Credit Apartent, ICBC, said, "Our 30 percent discount towards the second apartments loan remain unchanged."

Zhang Xin, Beijing Branch, Bocoms, said, "We'll strictly enforce the policies. Nothing has changed."

Ouyang Chunwei, Supervisor or Personal Banking, Societe Generale, said, "We provide discounts to the first apartment, but not for the second one. That has been our policy all the while."

Experts predict that banks will curb loan approvals in the second half of this year.

Hua Ercheng, Chief Economist of China Construction Bank, said, "Banks will extend fewer loans in the last few months of this year. Firstly, they issued too many loans in the first half, so loan management need to be stricter. Secondly, many projects have already received loans, so the need for loans has decreased."

Banks fear the economy's gradual recovery could be hampered by inflation. But experts have downplayed these fears.

They note with supply far exceeding demand, the economy is likely to remain stable for at least the rest of this year.

Concerns of inflation have grown along with China's economy. China's GDP for the first three quarters was up by 7.7 percent year on year.