Chinese banking stocks continue to slip and Japanese carmakers slide

Shares in Asia tumbled Thursday. In China the Shanghai Composite index plunged 3.6%, ending the day at 3,171, and in Hong Kong, the Hang Seng Index dropped 1.8% to 22,210. In Japan the Nikkei Index lost 0.6% to close at 9,383.

Chinese banks sank lower again Thursday as investors and the Chinese authorities await plans as to how banks will raise capital to support the massive loans they have made this year. In addition, Yin Zhongqing, deputy head of the finance and economic committee announced that the amount banks are predicted to lend in 2010 will fall to $730 billion to $1.2 trillion. That's far lower than the estimated $1.4 trillion loaned in 2009. "A level higher than 8 trillion yuan will pose serious inflationary pressure," he told Reuters. "I think five to eight trillion yuan in new loans next year would reflect the appropriately loose monetary policy."