CNN

One of the great challenges Chinese leadership faces is to move the economy - currently driven by exports and investment - toward a more sustainable course led by domestic consumer spending. While domestic consumption is rising, it still makes up just over one-third of China's total economy. American consumers, by comparison, power more than two-thirds of the US economy.

Much has been made of China's growing group of super rich which has spurred record sales for luxury goods makers. But much of the hope of the rising domestic spending rests with China's growing middle class. There are an estimated 350 million people in China's middle class, which are households that earn between $6,000 and $15,000. A government think tank predicted last week that by 2020 there will be 600 million Chinese earning middle-class incomes.

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China's shadow banking sector has gradually moved from the periphery of the economy to become an almost indispensable driver of growth. Not that long ago, the shadows were where small firms got the cash no one else would give them. Later, when China moved to rein in real estate speculation, the shadow banks proved to be lifeblood of property developers who were cut off almost overnight from bank credit.

The rise of non-bank funding sources has been vital to keeping growth ticking over in the midst of an economic slowdown.

The trend marks a distinct transfer of risk from the State (in the form of bank lending) to private investors, and comes at a time when local government finances are in a very bad shape.