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Nine major Chinese sectors labelled a credit risk

Nine major Chinese sectors labelled a credit risk

(28 March 2013 – China) To improve implementation of standardised loan procedures in order to reduce risk, the China Banking Regulatory Commission (CBRC) has warned banks against lending to nine major sectors. The banking sector regulator, cautioned the country's large-scale lenders about credit risks in nine major sectors, it said these sectors are hostage to the economic cycle or are suffering from overcapacity.

It identified these sectors as real estate and engineering machinery, steel, nonferrous metals, cement, coal-to-chemicals, shipbuilding, wind power equipment and photovoltaic production.

CBRC said these sectors require special attention from large-scale commercial banks.

Economists said the regulatory reminder can be seen as a move to improve the implementation of standardised loan procedures to reduce risks linked to some high-risk sectors.

The official risk warning comes as the recent bankruptcy of Wuxi Suntech, China’s leading maker of solar panels.
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