China’s shadow banking activity stopped growing during the first six months of this year, according to Moody’s Investors Service, growing slower than the country’s nominal GDP for the first time since 2012.

Shadow banking assets’ share of GDP fell to 82.6% of GDP as of June 30 this year, compared with its peak of 86.5% in 2016, according to an announcement posted on Moody’s website.

The statement cited the effectiveness of recent regulatory measures aimed at reducing the financial system’s “vulnerabilities created by increasingly complex and opaque funding chains.”

“Chinese shadow banking activity stopped growing in H1 2017 because of a fall in first, the issuance of higher risk instruments such as the banks’ wealth management products, and second, non-bank financial institutions’ asset management plans,” said Michael Taylor, a Moody’s Managing Director and Chief Credit Officer for Asia Pacific.

The release, however, warned that challenges associated with the tightening remain, and that core shadow banking activity continues to grow.

“Following the 19th Chinese Communist Party Congress, financial-sector regulation will likely continue to restrain the growth of shadow banking activities and address some key imbalances in the financial system,” says George Xu, a Moody’s Analyst. “However, the challenges associated with regulatory tightening and the broad deleveraging campaign remain.”

Authorities face ongoing challenges in preventing the de-risking of the financial sector from causing systemic disruption, Moody’s says, adding that limited transparency of some products and the ability of financial innovations to evade regulations add to the challenge.