Chinese equities drop on new banking restrictions

Real estate services firms SouFun Holdings (SFUN.NYSE) and E-House China (EJ.NASDAQ, 32E1.FRA) led a decline in Chinese equities in New York on Thursday, after regulators told Chinese banks to limit investments in non-publicly traded debt like wealth management products (WMPs), Bloomberg reported. Analysts said the curbs will affect not just real estate, which derives funding in part from WMPs, but also the wider economy, which is heavily dependent on credit. The new measures require banks to limit money raised from non-publicly traded debt products to 35% of all funds or 4% of total assets at the end of the year.