While reining in excess liquidity, China has left the lending tap wide open for small businesses, western regions, consumption and agriculture as the country gears up to rebalance the economy.

"Efforts have been doubled to encourage financial institutions to lend more to areas that are crucial for the national economy or those that have yet to receive adequate credit support, such as agriculture and small enterprises," said Zhang Tao, Director of the Financial Survey and Statistics Department of the People's Bank of China, the central bank.

The new loans extended to underdeveloped western regions in the first quarter grew by 29.6 percent year on year, 5.8 percentage points higher than the eastern regions, according to the central bank.

Meanwhile, outstanding loans for small enterprises had totaled 6.3 trillion yuan ($922.7 billion) by the end of March, an increase of 23.9 percent from a year ago—6.5 percentage points higher than that for large enterprises.