China's banking sector suffered a credit squeeze, late June, borrowing costs surged to record highs. Not surprisingly, both banks and borrowers have showed serious concerns about the stability of the system. CCTV talks with Shang Fulin, chairman of the China Banking Regulatory Commission, about those concerns.

China's key banks ranked high in Fortune's list this year. But most interbank borrowing operators won't forget tight liquidity conditions at the end of June. Under these circumstances, a question is rising: how is China's banking sector now?

"On the whole, I think the banking system is healthy. Several key indicators, such as lending and deposit growth, capital ratio and bad asset ratio, are almost the same from a year ago. Some are even performing better. Compared with the top 1000 banks in the world, our indicators are higher, which means better." Shang Fulin said.

Official data backed the comments. In the first half of 2013, Chinese banks' net profit was about 753 billion yuan, or $123 billion, which increased nearly 14 percent year on year. Meanwhile, the bad asset ratio was less then one percent, much lower than the global average level.

But the CBRC also notes the risks, especially in the local financing and property loans.

"Generally, the risks are under control. The local financing is better than general ones. It has long duration and lower bad loan ratio. Besides, most of our local financing are invested in manufacturing projects. The growth rate of property loan is lower than general loan's. Individual loans count around 60 percent of the total, which basically is safe." Shang Fulin said.

Shang also mentioned the risk of the so-called "shadow banks" in China. He said the "shadow-bank" products will bring some risks to the system, but the impact won't be big because the products' proportion is small.

Shang said that China will boost loans through innovation and guide banking loans, running to crucial sectors and industries, as well as to micro-and-small firms.