When can private loans become legal in China?

Banking is tightly controlled by Chinese government. But recently there was a report by the central bank of China, suggesting a legal status for private loans. This can open up a new business niche for foreign banks.
Most private loans are for companies who can not get loan from Banks. The interest is as high as 200% per year right now. Yes, this is not a type. 200% is widely accepted in private loan market because banks are not lending them any money. Not because of bad credit, but because the central bank has direct control on how much each commercial bank can lend per quarter. Yes, planned economy still rules here.
But now, it seems China is going to loosen up a little. This is huge. We will see how it progress.

67 thousand companies went out of business

Since 2005, People's Bank of China, the Chinese Federal Reserve, has been carrying out a plan to reduce amount of loans that private companies can get from Bank. It is totally working. Now large number of small companies are going out of business because of lacking of cash.
State owned business always get favorably inclined when applying for loans. So they don't really feel the pain. It is the private sector who is dieing from all the squeezing.
It is a good time to buy out those private firms in China if you have cash and business plans.