Fiscal expansion

Aside from support of monetary policies, governor Zhou Xiaochuan has called for more to be done on the fiscal front and structural reforms.

The message echoed with the remarks of finance minister Lou Jiwei. "In times of economic slowdown, expansionary reforms such as reducing administrative approval, targeted tax cuts and granting rural migrant workers welfare and benefits should take precedence," he said.

China still has room to expand fiscal policy to push structural reforms, he said, predicting an increase in budget deficit this year.

China raised its budget deficit to 2.3 percent of GDP in 2015, up from 2.1 percent in 2014. A 3-percent deficit ratio is normally considered a red line not to be crossed.

But director of the central bank's surveys and statistics department Sheng Songcheng on Wednesday suggest China could raise the ratio to 4 percent of GDP or even higher to offset the impact of reduced fiscal revenue and to support broader reform.

"The 3-percent warning line does not fit with China's reality," he said, citing China's relatively small outstanding debt, rational structure, continued growth in fiscal revenue and solid assets of state firms as among the factors backing his conclusion.

Foreign exchange

China's currency has been heading south since the country revamped the foreign exchange mechanism last year, and concerns about capital outflows have been on the rise.

Zhou on Friday repeated that there is no basis for continued weakness of the Chinese currency as the country's economic fundamentals remain sound. He also cited China's current account surplus and foreign exchange reserves as solid support for the balance of international payments.

There is no concern over China's foreign exchange adequacy and China has the ability to make overseas payments, he said.

HSBC reckons that the Renminbi will likely weaken moderately beyond the near term, given the challenges on the cyclical front and in China's balance of payments. It forecast the exchange rate against the US dollar at 6.9 by end of 2016.