Finally, a glimmer of good news from China (kind of).
The central bank has published a more granular look at credit expansion that shows it's getting a lid on that murky world of shadow banking.
Outstanding trust loans, which are pooled loans sold as funds to investors, expanded 10.7 percent in 2014, a fraction of the 61.1 percent surge in 2013. Credit from Chinese companies' commercial bills, basically a back endorsed IOU, shrank 1.8 percent, down from a
12.6 percent expansion in 2013 and a peak of 136 percent in 2010.
The development is double edged as it also suggests constrained financing for private enterprises and property developers.
The total outstanding value of aggregate social financing -- including bank lending, trusted loans, commercial bill borrowing and corporate bonds -- rose 14.3 percent, the least since 2005.
"The number reflects the central bank's tightened control over shadow banking,'' said Ding Shuang, a senior China economist with Citigroup Inc. in Hong Kong. "It shows central bank policy has been leaning towards tightening.''
With shadow banking apparently tamed for now, the People's Bank of China may have a freer hand to loosen monetary policy, with economists forecasting more interest rate cuts and lower bank reserve requirements this half.