The nation did not see a steep fall in investing for nonstandard credit assets, which account for about 15 percent of wealth management products offered by commercial banks, according to a report by Securities Times on Thursday, citing an official at the People's Bank of China, the central bank.

According to the report, Tao Ling, deputy head of the financial stability bureau at PBOC, said the new rules for China's asset management sector were never meant to clamp down on shadow banking or forbid investing in nonstandard credit assets. The shrinking trend in shadow lending is due to a drop in "channel services" for other institutions to bypass regulations and the multitier nesting of asset management products under the rules.

As for the bigger picture, Tao admitted the country's economic downturn and sluggish demand in the real economy could be attributed to contractions in shadow banking.

By the end of December, China's outstanding total social financing, a broad measure of credit and liquidity in the economy, was 200.75 trillion yuan ($29.7 trillion)－up 9.8 percent year-on-year, a record low. Newly added financing for the real economy was 19.26 trillion yuan in 2018, down 3.14 trillion yuan from the previous year.

Ruan Jianhong, head of the central bank's survey and statistics department, said at a news conference that the scaling down of outstanding total social financing is impacted by factors in both the real economy and the financial system, such as the slowing growth of investment in the real economy and China's structural deleveraging efforts.

With China's economy growing at a moderate pace, and a GDP growth rate of 6.6 percent last year, the country's yuan-dominated A-share market saw a steep slide in 2018 as the benchmark Shanghai Composite Index became the world's worst performer among major markets and the Shenzhen Composite Index plummeted 28 percent in the period.

The question of whether China's central bank should step in by directly purchasing stocks and bonds or take quantitative easing measures to prop up investor confidence incited a heated debate among experts and analysts.

Sun Guofeng, head of the central bank's monetary policy department, responded to these concerns by calling them unnecessary. China's financial system is dominated by banking, Sun said, therefore the authority should regulate bank behavior to improve the mechanism for transmitting monetary policy.

Sun said he did not see much significance to the tool of buying national bonds for monetary policies, as issuance of China's paper notes is based on the materials the state has rather than fiscal credit. Furthermore, Sun warned of fiscal deficit monetization in the case of PBOC's national bonds purchase in the market.

In Sun's view, China's monetary policy still can play a part in restructuring or regulating the total amount so as to achieve precise regulation and control. For instance, Sun said, the central bank could combine liquidity injection with the credit behavior of commercial banks.

China has started a campaign to contain the rapid spiral of macro leverage ratios in 2017. At the same conference Zhou Xuedong, PBOC spokesman, said China needs to be determined to deal with financial irregularities, otherwise risks in the area will be hard to root out.