Bubbles in U.S. and European markets could burst because their rallies are heading in the opposite direction of their underlying economies and will have to face corrections “sooner or later,” Guo Shuqing, chairman of the China Banking and Insurance Regulatory Commission and Party secretary of the central bank said at a briefing in Beijing on Tuesday.

China’s financial regulators are walking a fine line of trying to curb risks at home while limiting disruptions from abroad as the economy opens wider to foreign capital. The CBIRC vowed in January to stay “ahead of systemic risks,” after capping bank lending to the property market, slashing shadow banking activities and claiming victory in unwinding a wild expansion in peer-to-peer lending.

“China’s monetary policy has not been as easy as the U.S. and Europe,” said Steven Leung, executive director at Uob Kay Hian (Hong Kong) Ltd. “This latest comment will create worry of further tightening.”

Asia stocks tumbled and U.S. futures declined on Guo’s comments. The MSCI Asia Pacific Index erased earlier gains of as much as 0.8%. The CSI 300 Index in China fell as much as 1.4% and Hong Kong’s main gauge dropped almost 1%. Chinese government bonds gained from a shift toward haven assets, sending yields on benchmark 10-year notes to a nearly three-week low.

“Beijing calling the overseas market rally a bubble won’t help sentiment in Hong Kong stocks, which had been seeing strong inflows from the mainland,” said Castor Pang, head of research at Core Pacific-Yamaichi.

Fresh Inflows

Regulators are watching capital inflows into China, where the economy is still growing and interest rates are higher, although the size and speed of such inflows remain controllable at the moment, Guo said.

China’s top financial regulator also weighed in on the fintech sector, saying platforms that offer banking services must comply with the same capital requirements as traditional lenders to curb risks. The regulator has set different deadlines for each type of service, with the longest grace period of no more than two years, Guo said, without elaborating.

Guo also said bubbles in China’s property market remain relatively big, with many people buying homes for investment or speculative purposes, which is “very dangerous.”

A strong economic recovery, combined with a credit surge and a renewed fear of missing out have stoked buyer enthusiasm across China’s largest cities despite stricter curbs this year. Authorities have responded with a slew of policies to fine tune the industry, including a new mechanism on bank lending for real estate and fresh land-bidding rules designed to curb high-flying land costs.

Still, home prices in the secondary market, which faces less government intervention, gained the most in 18 months in January, official data showed last week. Existing-home prices of certain popular projects in Shanghai surged more than 30% last year, according to China Real Estate Information Corp.

“Guo’s comment reflects that Beijing wants a very stable financial market,” said Linus Yip, a strategist at First Shanghai Securities. “Stabilization is the ultimate goal of its monetary policy.”