Chinese Premier Li Keqiang has compared past efforts to stimulate the economy to “flood irrigation,” an ancient farming technique notorious for its wastefulness. Since he and President Xi Jinping took office six years ago, the yearly growth rate in fixed-asset investment has slowed from more than 20% to less than 6%. This was accomplished by constraining bank lending and other forms of credit creation.

The latest figures from the People’s Bank of China, or PBOC, however, suggest the policy of restraint could be moving into...