Landing gear down...

Trying to land in stormy conditions requires a pilot with steely nerves and great experience. What's the probability the Chinese land perfectly here?

HONG KONG — China’s banking regulator has told commercial lenders to restrict new lending to the financing arms of local governments, a measure designed to pre-empt potential overheating in the country’s booming economy.

Hong Kong, meanwhile, announced plans to increase taxes on luxury-home purchases, an effort to cool red-hot property markets.

A flood of lending by China’s state-owned banks, combined with a giant government spending program, helped mainland China stave off the worst of the global economic crisis and expand its gross domestic product by 8.7 percent last year.

The credit binge had the side effect, however, of setting off a surge in property prices, as much of the readily available cash flowed into the stock markets and property. Land prices in mainland China, for example, doubled in 2009 on a nationwide basis, according to economists at Standard Chartered in Shanghai.

That has brought worries about a property bubble and concerns that some of the loans might ultimately go sour.

Economists are also increasingly worried that the overall economy may be overheating.