From Xinhuanet (link)
China’s central bank, the People’s Bank of China, says the real estate industry is absorbing too much of the country’s capital, causing government attention.
“Real estate financing is making up a bigger and bigger share of the country’s financial sector. The health of real estate financing is of critical importance to the health of the financial sector. We must pay close attention to developments in both the real estate industry and home financing sectors,” Wu Xiaoling, deputy governor of the central bank, told a seminar here on Tuesday.
Housing prices have continued to soar, despite the government’s year-long efforts to stabilize prices and this has sparked grave concern that a housing bubble might burst.
According to Wu, Chinese banks’ lending to the real estate sector stood at 3.07 trillion yuan (380 billion U.S. dollars) by the end of 2005, accounting for 14.84 percent of all Renminbi lending by China’s financial institutions. This is equivalent to 16.75 percent of the country’s gross domestic product (GDP) in 2005.
