Analysts said there have been several indications that the Chinese government will adopt a bolder stance on foreign debt as it strives to improve financial efficiency and help the real economy during the growth pattern transformation. Among these signs:

The National Development and Reform Commission, China's top economic planner, said in a statement on Jan 27 that the nation will "moderately expand" foreign banks' middle- and long-term overseas debt and aim to improve offshore credit management as it opens the capital account.

PBOC clarifies rules on FTZ yuan business

Shanghai FTZ measures to be rolled out

The NDRC said its policies are intended to encourage Chinese enterprises' efforts to go abroad and borrow in dollars.

In December, the People's Bank of China, the country's central bank, released 30 guidelines on promoting the financial development of the China (Shanghai) Pilot Free Trade Zone. The PBOC said that enterprises from the FTZ can borrow abroad.

During the Party's Third Plenum in November, top policymakers called for an "appropriate" expansion of external borrowing.

Rising interest rates for bank loans in China and tight liquidity have pushed companies to seek cheaper financing instruments in overseas capital markets.

Analysts said the slowdown in domestic credit growth seen in the second half of 2013 could persist. They said seasonal factors, such as the Lunar New Year, may have caused the 17.4 percent rise in total social financing in January.

New loans totaled 1.32 trillion yuan ($216 billion) compared with 482.5 billion yuan in December, slightly more than expected.

PBOC figures show that the rebound in bank loans in January was driven by mid- to long-term corporate loans, which jumped to 826.2 billion yuan from 305.1 billion yuan in December, reflecting strong credit demand.

Zhu Haibin, chief economist in China at JPMorgan Chase & Co, forecast that benchmark interest rates and reserve requirement ratios will remain unchanged but credit tapering will continue, which points to a tightening bias.

Zhu noted that total social financing growth, which stood at 17.8 percent in the second half of last year, is expected to moderate to 16.2 percent in 2014.

Since May, Zhu said, the three-month Shanghai Inter-bank Offered Rate has climbed about 170 basis points - the rate stood at 5.5585 percent on Tuesday - which pushed the one-year government bond yield up about 110 bps.

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