Fiscal policies, particularly value-added tax cuts, will play a greater role in supporting the economy compared to monetary tools as China needs to stick to its deleveraging efforts, a central bank adviser said.

"Downside risks brought by external challenges will put pressure on both the monetary and fiscal policy fronts," Ma Jun, a People's Bank of China adviser, told China Daily.

"But the space on the monetary side is limited as we need to stick to efforts to promote deleveraging moves, while room for fiscal expansion remains ample - more tax cut policies can help to soothe economic concerns, in particular value-added tax," he said.

The central bank announced a steep cut last month in the level of cash that banks must hold as reserves, stepping up moves to lower financing costs and spur growth.

As China plans to step up efforts to boost infrastructure investment to support economic growth, regulators are able to lower the risk weight of green financing, because such efforts will help to guide more credit to support sustainable infrastructure projects, Ma said.

If the risk weight of green credit is reduced from 100 percent to 50 percent, the financing cost of all green credit support projects in China can be reduced by an average of 50 basis points, or 0.5 percentage points, Ma said.

There is no exact timeline for when such an adjustment can take place, he said.

The central government has announced a mix of policy signals to reduce the tax burden of enterprises and boost infrastructure spending, which declined to record lows earlier this year.

A meeting of the Political Bureau of the Communist Party of China Central Committee in late October pointed to increased downward pressure on the economy and a greater need to enhance support for small businesses and the private sector.

Gao Ting, head of China Strategy at UBS Securities, suggested to watch future economic figures and how the policies pan out, because although policy catalysts could boost investors' risk appetite and trigger a stock market rally in the short term, their effectiveness will need to be verified by economic data.