China Said to Warn Banks as Local Officials Seek New Loans

China warned its banks to resist demand for credit from local governments as new officials in cities, towns and villages pursue projects that bolster growth, a person with knowledge of the matter said.

The China Banking Regulatory Commission told lenders earlier this month to be on watch for loan applications for new programs disguised as funding requests for unfinished ones, said the person, declining to be identified as the order isn’t public. Requests may increase as local leaders appointed in a nationwide shuffle seek funds to help create jobs in their regions, the person said.