BEIJING: The global economic recovery is likely to be "slow and tortuous" and China faces risks from a multitude of factors including trade protectionism and bad real estate loans, China's Banking Regulatory Commission (CBRC) said on Tuesday, June 15.
"The chances in 2010 of some credit assets forming into substantive risks and losses has increased," the CBRC said in its annual report, published on its website on Tuesday.
Among the risks faced by Chinese banks, it identified quite large risks from "unwise lending" to local government investment units, as well as the sovereign debt crisis and US dollar exchange rates.
It said some banks were lending large amounts to local governments units, noting "risk management has been inadequate, and there are quite large latent risks in lending to local investment vehicles."
CBRC's chairman, Liu Mingkang, has repeatedly said the regulator will strictly control the speed of lending and is paying special attention to lending risks in the property sector.
The government has also warned of the dangers of China's red-hot property market, which it has described as one of the country's most pressing economic problems, and has tried to get banks to rein in property lending.
CBRC's annual report also warned of risks from "imprudent behaviour" in personal housing loans in 2010.
"The risks from a chain reaction in lending for real estate development may warrant attention, and latent credit risks may be increasing," said the report, posted at http://zhuanti.cbrc.gov.cn/subject/subject/nianbao2009/2009zwzz.pdf
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