The ratio of outstanding non-performing loans (NPL) of China's major banks amounted to 17.8 percent by the end of 2003, down 5.32 percentage points from the beginning of the year.

The major banks refer to four state commercial banks, three policy banks and 11 joint-stock commercial banks. The outstanding loans of these banks made up 80.74 percent of the total of China'sfinancial institutions by the end of 2003, latest statistics of the China Banking Regulatory Commission show.

By the end of 2003, outstanding loans of these major banks totaled 13,710 billion yuan (about 1,660 billion US dollars), up 2,330 billion yuan (282 billion dollars) from the year's beginning. Of this, 2,440 billion yuan (about 300 billion dollars) was classified as NPLs, down by 190.6 billion yuan (some 23 billion dollars).

Broken down, the NPL ratio of state-owned commercial banks stood at 20.36 percent by the end of 2003, down 5.85 percentage points, policy banks 17.39 percent, down 2.4 percentage points andjoint-stock commercial banks 7.92 percent, down 4.01 percentage points.

The commission owned the remarkable improvement to better credit control and enhanced risk management systems in these banks.

An official with the commission cautioned that despite the progress, these banks are still facing a tough task ahead.

"The ratio of non-performing loans is till high and, due to excessive capacity expansion in certain industrial sectors, the job to contain the growth of non-performing loans is very difficult," said the official.