Chinese banks are feeling the pain as problem loans are increasing

The boss of China’s central bank has acknowledged that mounting problems in the property sector and for debt-laden local governments mean the country’s banks will struggle to boost lending enough to stimulate economic activity.

Pan Gongsheng, the head of the People’s Bank of China, told a major financial forum in Shanghai this week that real estate loans and local government financing instruments make up a large part of the 250 trillion yuan ($51.6 trillion) in bank loans of the country. .