Beijing/Shanghai: China said it will step up guidance on property lending and seek to counter speculative capital arriving from abroad amid mounting risks of asset-price bubbles in the world’s third largest economy.

Government agencies will increase monitoring of loan flows to prevent funds illegally entering the property market and so-called hot money from affecting China’s markets, the State Council said on Sunday in a statement posted on the government’s website. China’s cabinet reaffirmed a 40% down payment ratio for second homes after speculation that the requirement would increase. Prices across 70 cities rose at the fastest pace in 16 months in November, driven by a $586 billion (Rs26.84 trillion) stimulus package and lending by banks.

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