There was no flip-flopping from Liu Mingkang. As banks hosed the economy with credit, the chairman of the China Banking Regulatory Commission spent the year in a state of increasing agitation. In May – by which time lenders had advanced almost Rmb6,000bn of new loans, triple the run-rate of a year earlier – Mr Liu was muttering darkly about the “accumulation of risks”. By December, as the totaliser neared Rmb10,000bn, he was announcing direct supervision to guard against mounting bad debts.

We have, of course, been here before. A state-directed lending splurge in the mid-1990s culminated in China's banks dumping about Rmb1,400bn of bad debts into “bad bank” asset management companies in 1999, financing the transfers by bonds issued by the AMCs. The big commercial banks unloaded another Rmb1,200bn of bad assets in 2004-05, prior to listing in Hong Kong. But when the time came for the AMCs to repay the principal on the 1990s vintages this autumn, banks simply rolled over the bonds for another decade – in effect enabling the government to delay recognition of non-performing loans issued in the mid-1990s until 2019.

Sweeping NPLs under the carpet is actually sustainable, up to a point: so long as bad loans are financing economically productive projects, the efficiency of aggregate bank lending should rise over time. On the estimates of research boutique GaveKal, the fiscal burden of making good on the total stock of bad loans in 2019 will be between 5 and 7 per cent of gross domestic product – expensive, but not completely ruinous.