Property Controls in China

According to a newsletter written by Adam Roseman of ARC Investment Partners, China’s banking regulator claims the country’s lenders are capable of dealing with a 50% fall in property prices. Liu Mingkang of the China Banking Regulatory Commission confirmed that the regulator had performed the necessary tests on domestic banks.

“The stress tests do not reflect the CBRC’s view about the property market’s direction, but the results should strengthen the confidence of all banks in implementing the property controls,” Mr. Liu stated in an interview.

Though few predict such a dramatic plunge in pricing, costs have begun to decrease slowly in the major cities. As a result, many have criticized Beijing’s tightening policies.

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