China Should Prepare for Rising Bad Debt: Caixin Cites Top Official

China should actively respond to a resurgence of non-performing loans and urge banks to categorize their assets and increase provisions, China Banking and Insurance Regulatory Commission Chairman Guo Shuqing said at a forum, Caixin reported. Some of the loans borrowed by SMEs during the pandemic will eventually be non-performing, some local government financing vehicles have difficulties making payments, defaults by large companies have increased, while bubbles have emerged in regional housing markets, Guo was reported as saying. China should also strictly prevent the resurgence of shadow banking and resolutely rectify all illegal offering of securities, Guo was cited as saying.