There are early signs that the recent tightening of regulatory enforcement in China's financial sector is cooling credit growth in the shadow-banking sector. The authorities appear committed - for now - to containing financial sector risks, which could be positive for system-wide stability if maintained over the medium-term, says Fitch Ratings.
However, it remains to be seen if the authorities stay committed should economic growth slow faster than they are willing to tolerate.
The authorities are at least likely to tread carefully, given the potential for policy mis-steps - such as the possible triggering of a credit crunch.
The latest total social financing (TSF) data point to some migration of credit back on to banks' balance sheets, reversing the trend seen during the second half of 2016. Bank lending growth has held up, while non-loan TSF declined in May.
The main drag on non-loan TSF was a fall in corporate bond issuance, which reflects weaker market liquidity and a rise in bank funding costs that has reduced incentives for banks to invest in corporate bonds and other non-loan financial products.
Entrusted loans and bill acceptances also fell in May.