Hong Kong Press: property prices are a huge threat to China's financial stability

South China Morning Post, a Hong Kong newspaper, is out today with a report on comments made by a former advisor to the Chinese State Council, Xia Bin, who worked as a senior official at the People's Bank of China.

Key quotes

Systemic risks are elusive and spread fast" in China.

China's official non-performing loan ratio, for instance, bore little resemblance to the true figure ... "From a dynamic perspective, it should be beyond [the official figure of] 2 per cent".

Similarly, banks' exposure to the property market was far higher than official figures suggested.

Official numbers say that about a quarter of all outstanding bank loans are linked to real estate, but Xia said the real figure could be as high as 80 per cent if all loans that used property as collateral were taken into account.

The whole Chinese economy has been "hijacked" by property, and that has created an enormous threat to the country's financial stability.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these securities. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Forex involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.