Chinese regulators have taken steps that will keep the world’s second-largest economy safe from widespread bad loans, China Merchants Bank Co. President Ma Weihua said.

Non-performing assets will be “diluted” by the economic growth rate China maintains in the next eight to 10 years, Ma said in an interview Wednesday in the Chinese port city of Dalian while attending the World Economic Forum meetings. Regulators also identified problems such as souring debt by local governments “relatively early” and sought to curb risks, said the president of China’s sixth biggest bank by market value.

“It’s impossible to have a repeat of the large-scale non-performing assets” seen at Chinese banks before the government spent more than $650 billion in the past decade to bailout and list the nation’s biggest lenders, Ma said.

A record credit boom starting in 2009 to fend off contagion from the global financial crisis and more than $1.7 trillion of local government liabilities has fueled concerns that China’s banks will be saddled with bad loans. Regulators this year raised capital requirements and clamped down on off-balance sheet assets, prompting Merchants Bank to seek as much as 35 billion yuan ($5.5 billion) in a rights offer.

The Shenzhen-based lender last month posted a 41 percent increase in first-half net income to 18.6 billion yuan. Shareholders approved its planned rights offer last week.

Ma also said Wednesday that Merchants Bank will strive to bolster its ability to price risk as the nation works to liberalize its system for setting interest rates. The central bank currently sets a ceiling for the interest rate paid on bank deposits and a floor on the rate for bank lending.

Central Bank Governor Zhou Xiaochuan said at the end of 2010 that China would make “noticeable progress” in the next five years on interest-rate liberalization.

“A good bank should seek a balance of risk and return,” Ma said. “We think that the bank will be unable to build its ability for risk pricing if it always focuses on enterprises with low risk and runs low-risk businesses.”