China's banking regulator has run stress tests in the country's trust firms to see if they can withstand a downturn in the property sector, the Economic Observer reported on Saturday, citing unidentified industry sources.

Chinese developers have been using property trust products sold by the trust companies as a channel to raise funds for new projects.

Trust firms are required to submit information about their exposure to the real estate sector, including investment sizes, collaterals and risk control measures, to the China Banking Regulatory Commission (CBRC), the newspaper reported.

The stress tests on trust firms were conducted as the government tightened measures in the real estate sector to curb runaway property prices. Chinese banks were also told by the CBRC to conduct similar stress tests and to keep tight control over property lending.

The newspaper said the stress test results may result in less funding to property development from trust firms.

In the first half of this year, Chinese trust firms issued property trust investment plans totaling 67.7 billion yuan (nearly $10 billion), compared to 40 billion yuan for the whole of 2009, the newspaper reported.

In comparison, bank loans went to property developments were 442.3 billion yuan in the first half, the People's Bank of China said.

(Reporting by Zhou Xin and Alan Wheatley; Editing by Ron Popeski)