China has moved away from its old growth model which was heavily reliant on investment and will rely less on stimulus to boost the economy in future, People's Bank of China governor Zhou Xiaochuan said on Friday.
Zhou's comments echoed those of other top officials at China's parliament this week which suggested that Beijing will be more cautious about spending this year while it focuses on reducing the risks from a rapid build-up in debt.
After years of heavy pump-priming, markets worry less generous stimulus could retard the pace of growth not only in China but globally.
But analysts believe Beijing will continue to keep the system well supplied with cash to avoid the risk of a sharp slowdown in economic growth, even as they continue to tighten the screws on financial regulations.
"We now emphasize the new normal of the economy, shifting from the past growth model of quantitative growth... referring to the accumulation of capital and investment to boost economic growth," Zhou told reporters on the sidelines of the annual parliament session.
"While pursuing higher quality growth, we will have to reduce our reliance on the old growth model of investment," said Zhou, in what was likely his last news briefing before his expected retirement this month.
Zhou said China needs to improve its regulatory supervision as soon as possible to curb risks to the financial system.
He said China has begun to make progress in reducing such risks, but numerous threats remain, such as a lack of transparency at financial holding companies and digital currencies.
"Everybody should see that China has entered a stabilizing leverage and is gradually reducing the leverage situation. The trends are clear," said Zhou, referring to high debt ratios.
Zhou pointed to a moderation in China's broad M2 money supply growth last year as evidence that the official "de-risking" and "de-leveraging" campaign was working.
The PBOC said on Friday that M2 growth was 8.8 percent on-year in February, higher than January's 8.6 percent growth but down from 11.1 percent in the year-ago period.
Financial risks from private financial conglomerates that used highly leveraged acquisitions to expand rapidly in recent years have come to forefront with the government seizure of Anbang Insurance Group Co Ltd.
The central bank is drafting rules on financial holding companies, PBOC Vice Governor Pan Gongsheng said at the same news conference.
Earlier this week, Premier Li Keqiang announced a growth target of around 6.5 percent this year, the same level that it handily beat in 2017 thanks in part to massive government infrastructure spending and record bank lending.