The central bank yesterday warned about rising risks in the fragile banking system after new figures showed that outstanding property-related loans soared to 2.13 trillion yuan (HK$2 trillion) by the end of last month. In the first three quarters of this year, property loans worth 426.4 billion yuan were recorded. This accounted for 37 per cent of commercial banks' total medium and long-term loans, up 18 percentage points compared to the end of 1997, Xinhua reported, citing a quarterly report from the People's Bank of China. Fixed deposits accounted for only 43 per cent of the total deposits in the first three quarters, down 10 percentage points from the end of 1997. Given that most fixed deposits are for less than one year, it means that commercial banks have been taking short-term deposits and giving long-term loans, creating systemic credit risks for the banking system. The report noted that outstanding property-related loans soared from 310.6 billion yuan at the end of 1998 to 2.13 trillion yuan at the end of September this year. 'This is rare in the history of development anywhere in the world with the property-related credit business developing so fast and in such a short period,' it said. The central bank began to crack down on property lending in June when it issued directives to the commercial banks to better regulate such loans. Echoing earlier comments by central bank governor Zhou Xiaochuan, who warned that some sectors of the economy are in danger of overheating, the report said duplicated construction projects continued to mushroom. It said overheating was evident in such sectors as steel, cement, cars and real estate.