The chances of an economic crisis in China are low but a "hard landing" is still possible, US Federal Reserve chairman Ben Bernanke has said, Bloomberg reported Sunday. In a letter to Senate Banking Committee chairman Richard Shelby, dated August 30, Bernanke said that, although China's banking sector is blighted by escalating bad loans, "the government possesses sizeable resources and is unlikely to allow the banking system to fail". Observing that rapid investment was leading to overcapacity which would in turn see companies unable to pay off their debts, Bernanke said there was little evidence of widespread overheating or climbing inflation rates. But he didn't discount the possibility of a "hard landing" as growth slows sharply in response to moves by Beijing to cut down on investment spending and reduce its reliance on export-led growth. "However, they still have not allowed a substantial appreciation of the renminbi, a step that many analysts argue would be the most effective way to address the imbalances in the economy," Bernanake added.