China’s central bank has ordered banks in the southern city of Shenzhen to investigate business loans collateralised with real estate made this year, as the city’s housing market heats up rapidly, two banking sources said on Monday.

China has significantly increased credit support to the economy this year, mainly to help struggling firms battered by the coronavirus outbreak, issuing a record $405 billion in bank loans in March.

But some analysts have raised concerns the credit boom will be illegally channelled to further fan property bubbles despite a nation-wide crackdown on property speculators.

Property prices in Shenzhen, China’s Silicon Valley bordering Hong Kong, have been some of the fastest growing in the country in recent weeks.

Banking sources said the Shenzhen branch of the People’s Bank of China (PBOC) issued an internal notice on Monday, asking banks in the city to report the outstanding amount of such business loans by end March, compared to the outstanding amount at the end of December and the end of March 2019.

They were also asked to look at the authenticity of the borrowers’ operating conditions, when their businesses were founded and for how long they had owned the properties used as collateral for the loans.

More specifically, the banks were asked to look into whether these borrowers had bought new residential or commercial properties since Jan. 25, around the time the coronavirus crisis intensified, their plans in applying fiscal subsidies to lower loan interest and the actual interest rate on their loans.

“We’ve submitted the data to the central bank,” a source at a state-owned bank in Shenzhen told Reuters.

The PBOC did not respond to a request for comment. The PBOC has previously clamped down on the use of consumer loans for property purchases. While business loans can be secured by other assets, such as export orders, the central bank is currently focusing on those secured by real estate.

New home prices in Shenzhen, a city of 13 million, rose 0.5% in March on a monthly basis, and 1.6% in the secondary market, according to the Statistics Bureau.

The Shenzhen housing bureau said over the weekend that the recent property rally was mainly triggered by pent-up demand, and it would take “serious measures” against illegal price hikes.

China’s top decision-making body, the politburo, said in a meeting last week that the country’s property policy that “houses are not for speculation” will continue, a slogan Beijing has used to demonstrate a tough stance on speculation.

But it has also said the “healthy development” of the market should be ensured, and many analysts maintain the view that there will be greater policy tolerance and more local level policy tweaking to prevent the market from falling sharply, given its importance to the economy.

“Some small business owners may also use property...to obtain lower cost funding to sustain their business. As transactions return, the property sector is unlikely to present a major financial risk to the macro economy,” ANZ analysts wrote in a note earlier on Monday. Meanwhile, the euro zone’s trade surplus with the rest of the world grew in February, with a decline in imports from China as well as sharply lower energy needs because of mild winter weather.

The unadjusted goods trade surplus grew to 23.0 billion euros ($25.1 billion) in February, compared with 18.5 billion euros a year earlier. Exports rose by 1.6%, while imports fell by 1.0%.

For China, which already had widespread coronavirus restrictions in place in February, exports from the European Union as a whole were slightly lower than in February 2019. However, imports were down by 8.1%, according to data on Eurostat’s website.

Energy imports as a whole also declined by 9.6% in February, when comparing Jan-Feb data issued on Monday and January data from a month ago. That translated into 10.1% lower imports from Russia and 5.9% less from Norway.

The trade surplus with the United States, by contrast, grew by 21% in the month as exports increased and imports declined. The persistent surplus in goods has been a source of transatlantic tension. On a seasonally adjusted basis the eurozone trade surplus also rose to 25.8 billion euros in February from 18.2 billion euros in January. Exports were 1.8% higher month-on-month and imports 2.3% lower.

Agencies