Experts: Financial risks still manageable despite bad loans

China's financial risks are manageable despite the steep increase in nonperforming loans during the first six months of the year, said Yang Zaiping, executive vice-president of the China Banking Association.

"Allowances for the loan losses of banking institutions reached about 3 trillion yuan ($471 billion), which is enough to cover the existing nonperforming loans of 1.76 trillion yuan," Yang said on Saturday.

He said that the rise in bad loans is inevitable due to a rapid credit expansion since the financial crisis of 2008. Bank loans increased by more than 9.59 trillion yuan in 2009 alone, up 31.74 percent from the previous year.