China caps mortgage loans to ward off housing bubbles

Financial regulators reverse course on coronavirus-era easing

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Visitors are seen at a real estate fair in Huaian, Jiangsu province. China is attempting to rein in a real estate bubble that has erupted in cities. © Reuters

IORI KAWATE, Nikkei staff writer

BEIJING -- China on Thursday ordered banks to cap loans to homeowners and property developers, the latest effort by the government to rein in a real estate bubble that has erupted in cities.

The directive, which applies only to Chinese lenders and not international banks operating in China, will go into force Friday.

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