The debt level of the PRC had raised increasing concerns in the non-bank financial market, particularly the shadow banking market.  Shadow banking is a term for the collection of non-bank financial activities that provide services similar to conventional commercial banks, sometimes through the conventional commercial banks.  In general, shadow banking takes place through three types of institutions.  The first includes third-party wealth management products and trust companies, or financial institutions without licenses and regulatory oversight.  The second category is credit guarantee companies, microcredit firms, or those without licenses and partially regulated.  The last type includes entities with licenses but with inadequate regulation, such as money market funds, securitized products, and off-balance sheet products.

On March 7, 2014, the first onshore bond default occurred in Mainland China.  The default concerned an onshore corporate bond issued by a struggling Chinese solar-equipment manufacturing company and was not a product of the shadow banking market.  However, the alarm this event triggered was by no means confined to the non-bank corporate bond market, and it had forced reflection upon the threat that the non-bank financial market as a whole, particularly the shadow banking market, in the PRC was posing.