China’s plan to rein in property prices with a record homebuilding program may worsen local debt risks even as it proves a boon to companies from domestic cement makers to Chilean copper exporters, Bloomberg reported. Premier Wen Jiabao aims to build 36 million low-cost homes by 2015, an initiative that will see 2 trillion yuan ($307 billion) added to local government borrowing by 2012, bringing it to a total 12 trillion yuan, Standard Chartered Plc estimates. The surge of loans by banks to local authorities may spark a wave of bank failures that hobble economic growth.

China's regulators plan to shift 2-3 trillion yuan (£268-404 billion pounds) of debt off local governments, sources said, reducing the risk of a wave of defaults that would threaten the stability of the world's second-biggest economy, Reuters reported. The plan is the first concrete move by the government to tackle the bad debt in local government financing vehicles. It could boost investor confidence in Chinese banks, which provided many of their loans as part of the massive economic stimulus programme launched by Beijing in late 2008 to counter the global financial crisis.

China's central bank said it will increase the role of interest rates this year in managing inflation expectations and regulating overall demand, The Wall Street Journal reported. The People's Bank of China also said that during the 12th five-year plan, which lasts until 2015, it will continue to loosen its interest-rate oversight by "gradually liberalizing the pricing rights of some financial products" at chosen financial institutions.

Suppliers to Saab Automobile remained reserved Monday after owner Spyker Cars NV said it has found a new partner in China that will provide funds for the troubled Swedish car maker, Dow Jones Daily Bankruptcy Review reported. "On paper it looks like a positive first step," said Svenake Berglie, chief executive of the Swedish supplier organization FGK. "From the supplier side, we'll wait and see what happens next." Spyker said Monday it had signed a deal Pang Da Automobile Trade Co.

Saab Automobile owner Spyker Cars NV Monday said it has found a new partner in China that will provide fresh funds for the troubled Swedish car maker, giving investors hope the company can survive after a previous deal collapsed last week, The Wall Street Journal reported. The deal, with Pang Da Automobile Trade Co., will give Saab enough money to restart production and survive for about a year, according to Spyker Chief Executive Victor Muller, but Spyker still needs to find other investors to give it a long-term future.

Saab Automobile's future was again cast in doubt Thursday after owner Spyker Cars NV said a EUR150 million ($212.2 million) investment agreement with a Chinese auto maker had fallen apart, Dow Jones Daily Bankruptcy Review reported. The announcement puts Saab Chairman and Spyker Chief Executive Victor Muller under intense pressure to come up with another deal fast. Saab's plant in Trollhattan, Sweden, has been idle since production was halted six weeks ago after suppliers stopped delivering parts because they hadn't been paid.

Saab's new partner Hawtai defended itself against claims reportedly made by a top Swedish diplomat that raised doubts about the Chinese automaker's ability to salvage the Swedish car brand, Agence France-Presse reported. In a deal unveiled on Tuesday, Hawtai is set to inject 150 million euros ($223 million) into cash-strapped Saab through a partnership including joint ventures in manufacturing, technology and distribution.

Spyker Cars NV, which owns the troubled Swedish car maker Saab Automobile, is in talks with three Chinese companies about possible investments, according to two people familiar with the situation, as the Dutch car maker Friday cut its 2011 sales outlook and reported an operating loss for the first quarter. The Chinese companies are Great Wall Motor Co., China Youngman Automobile Group Co. and Jiangsu Yueda Group Co., two people familiar with the matter told Dow Jones Newswires.

Industrial & Commercial Bank of China (1398) Ltd. led the nation’s biggest banks in curbing defaults in the first quarter, helping alleviate concern that their asset quality may deteriorate following a two-year credit boom, Bloomberg reported. Bad loans at Beijing-based ICBC, the world’s most profitable bank, dropped almost 4 percent from the end of 2010 as earnings for the three-month period climbed 29 percent from a year earlier, according to an exchange filing yesterday.

The first yuan-denominated share to list on the Hong Kong stock exchange is laying the groundwork for a "seismic change" when China allows its citizens to invest abroad more freely, the exchange's head said. In an exclusive interview with The Wall Street Journal, Charles Li, chief executive of Hong Kong Exchanges & Clearing Ltd., said exchange officials are preparing for much greater outbound investment from China that would drive demand for yuan-linked products in Hong Kong.