Liang noted that China’s shadow banking sector had shrunk by RMB29 trillion ($4.3 trillion) as of end June from an all-time peak, which he did not specify, the report said.

The shadow banking sector, which includes wealth management fund products, entrusted loans, small credit and peer-to-peer loans, was estimated at RMB84.8 trillion in 2019, equivalent to 86 per cent of gross domestic product and 29 per cent of the nation’s total banking assets. 

For some time, policymakers have worried that certain products carry large risks because of their complex structure, while inappropriate financial innovation has led to new variants of shadow banking, state media Securities Daily quoted Liang as saying in a report on Saturday, and reiterated by the SCMP report.
 
There have already been concerns about fractures in the Chinese economy, as in the case of debt-laden real estate developer Evergrande, for example.
 
In 2018, China brought in rules to suppress shadow banks and regulate off-balance-sheet financial activities by asset management firms, giving them until the end of 2021 to comply with the rules.