Broadcasting Time: 2006-05-23

The Chinese government has signaled that it will use a combination of policies to ensure the healthy development of the country's real-estate industry.

What is behind the price hikes?

Also, China is set to open up its banking sector by the end of the year. Some foreign financial institutions still seem unsatisfied.

But there are also other opinions on this issue.

Hello and welcome to Biz China. I'm Tu Yun in Beijing. Later in the show, European Union Commissioner for Internal Markets and Services, Charlie McCreevy, will be with us to share his opinion on China's financial reforms. But first, let's briefly review the major business events of last week.

World leading auditing advisory company Ernst & Young has withdrawn a report claiming that China's banks face more than 900 billion US dollars in non-performing loans.

The US-based auditing firm says additional research has determined that its original assessment cannot be supported. It has apologized for its earlier report.

In the research paper, issued early this month, Ernst & Young estimated China's bad-loan exposure to be 911 billion dollars, with the four big state-owned banks accounting for nearly 40 percent, or some 358 billion dollars, of the total debt.

China's central bank refuted the analysis, saying the report seriously distorted the country's banking assets.

The People's Bank of China said the country's non-performing loans amounted to 162 billion dollars at the end of March and that the bad-debt rate had dropped to 8 percent from the 8.6 percent reported in the same month last year.

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