China to tackle property speculation

Beijing: Premier Wen Jiabao warned of “latent risk” in China’s banks and pledged to crack down on property speculation as the government faces the consequences of flooding the economy with money to drive growth.

“The domestic economy still faces some prominent problems,” Wen said in a speech in Beijing to the National People’s Congress. He also cited excess capacity in manufacturing and weak support for rural income growth.

Wen’s comments reinforce concern that loans made in last year’s record 9.59 trillion yuan (€1.03 trillion) credit boom may go bad.