China's monetary policy can play a bigger role in helping the economy move out of subdued inflation, a situation that requires careful attention, as it could do harm to the economy if not dealt with properly, Huang Yiping, a member of the China Finance 40 Forum and dean of Peking University's National School of Development, said.

"I think one particularly good thing in recent policies is that we are now pushing for a reasonable rise in the price level," Huang said.

Huang, also a member of the monetary policy committee of the People's Bank of China, the country's central bank, made the remarks at a conference held by the China Finance 40 Forum, a private think tank, on Monday.

"Over the past period, aside from the issue of strong supply and weak demand, what I worry about most is low inflation," he said. "I agree that monetary policy can play a bigger role (in pulling the economy out of weak prices)."

As this year's two sessions approach, Huang said that while China sets consumer price index targets every year, the focus has been largely on preventing the risk of high inflation rather than ensuring that the target can be reached and avoiding excessively low inflation.

Now, he said, the situation has shifted. "I think the damage that low inflation, especially deflation, does to the economy is by no means small, and may even be more serious (than high inflation)," Huang said.

However, he stressed that low inflation may not be fully fixed by monetary policy alone.

"My view is that it is more of a combination punch," he said, adding that monetary policy should fix weak prices by increasing liquidity and lowering interest rates, while fiscal and structural measures should work in tandem, including helping repair the balance sheets under heavy pressure at the micro level.

Huang also said it is "very necessary" to ensure renminbi exchange rate flexibility, with market forces playing a decisive role in pricing, during the 15th Five-Year Plan (2026-30) period as the country further advances renminbi internationalization.