PBOC warning on lending

In a warning to banks on issuing loans for working capital, People's Bank of China Governor Zhou Xiaochuan said the proportion of working capital funds to the country's gross domestic product was 70%, the highest in the world. He said the world average was 50% and warned that there was a high risk of company debt-to-equity ratios slipping beyond sustainable levels. Zhou's caution came as China's State Council continues to look at ways to encourage companies to raise capital by issuing equity instead of by borrowing.