High velocity helps channel funds into real economy

However, Tan said she expects to see more detailed measures from the government.

She said she wants to know if the companies receiving loans can use them for research and development activities that usually take place within China. "It would be a more innovative way of using the money and it would sharpen Chinese export-driven companies' competitiveness."

Bi Jiyao hailed the CBRC's efforts to invite private capital into the financial sector.

"China's capital-thirsty small and medium companies will find it easier to access loans once private capital sets up financial institutions," said Bi.

In this way, illegal fund-raising activities will also be curbed and the country's financial risks will actually be reduced, said Bi.

Morris said the CBRC's move to securitize quality bank loans will bring more liquidity into the Chinese market, but he warned of risks involved in mortgage-backed loans, citing the subprime crisis in the United States.

The CBRC has not specified whether it includes property loans in the asset securitization program.

All the experts maintained that more detailed measures should be mapped out as soon as possible.

China is pursuing a prudent monetary policy amid its efforts to strike a balance between stabilizing economic growth and guarding against financial risks.

Tan said the Chinese economy is likely to grow at around 7 percent this year, given the weak momentum seen in the first half and the government's efforts to push ahead with structural reforms.