Experts expect stable money policy to continue

The new gauges aim to be in line with national development goals and the real economy. The four previous performance benchmarks were profitability, business growth, asset quality and solvency.

Wen Bin, chief analyst at China Minsheng Bank, said the new benchmarks will effectively encourage State-owned lenders to more actively participate in serving national strategy and supporting real economy.

"The PBOC has also recently issued a regulation to cap property loans by banks, which means the amount of liquidity flowing to the real estate sector will be limited," Wen said. "The combination of these policy steps will effectively guide liquidity into the real economy."

In a similar vein, Li Keaobo, a senior researcher at the Academic Center for Chinese Economic Practice and Thinking at Tsinghua University, said he believes the new benchmarks will effectively "pull commercial banks from their previous dilemma of striking a proper balance between the mandate of boosting smaller businesses and ensuring a certain level of profitability.

"The previous benchmark, which includes the level of profitability, has pushed commercial banks to constantly give loans to the real estate sector, pivoting away from other sectors in the real economy."

The Central Economic Work Conference held in December focused attention on the country's weak spots in industries and said that China will ensure better implementation of key projects targeting breakthroughs in key technologies and solutions to bottleneck-problems, forging new cutting-edge technologies.

It will also boost its ability to achieve self-sufficiency in its industrial chains and supply chains.

Wen, the Minsheng Bank analyst, said this could mean more financing support will be needed for high-tech and manufacturing businesses. Innovative models must be launched to link them with support from commercial banks.

"The pilot model of venture loans is a possible measure to encourage commercial banks and innovative, technological firms to share gains and risks together," Wen said, referring to the loan trial model piloted in 2016 that allowed commercial banks to participate in combined debt-equity investments in startups and small businesses.

Wen said he believes this pilot will be expanded this year.

Wu from Changjiang Securities, on the other hand, believes that a more developed multi-tier capital market is strongly needed to channel funds into such firms, as innovative and technological businesses mostly bear greater risks that conventional lenders are willing to take. He said he believes more efforts will be rolled out in this regard this year.