These days Chinese regulators spend much of their time chasing shadows. The shadows in question belong to the banking industry, the more dimly lit reaches of which have grown voluminously, some might say alarmingly. So steep has been the trajectory that almost half of all new credit is now supplied by non-banks or through off-balance-sheet vehicles of regular banks, up from just 10 per cent a decade ago.

Optimists see shadow banking as a largely positive development, the stirrings of a more sophisticated financial system in which interest rates break free of state control and risk is more closely matched with reward. For pessimists, shadow banking is an accident waiting to happen – Middle Kingdom subprime.

Certainly, the optimists are too blasé. There is every reason to believe that much of the credit sluicing through these informal channels goes to less-than-worthy investments. Rather, shadow banking is the deformed stepchild of contradictory state policies. On the one hand, Beijing wants a financially sound banking system with tightly controlled deposit and lending rates. On the other, it seeks high economic growth, which must be fed by a stream of few-questions-asked credit. The upshot is an ill-defined and under-regulated part of the financial system that now controls assets worth about Rmb20tn ($3.2tn), or 40 per cent of gross domestic product, a fourfold increase from 2008.