There's a wide range of views on the issue now.

Green wrote in a report on May 21 that while deleveraging cannot be achieved with super-loose monetary policy, it also cannot be attained with high real interest rates and low nominal GDP growth.

"We believe the time is coming when a RRR cut and broader-based easing will be needed to stabilize growth," he wrote. "You cannot deleverage an economy that is not growing."

PBOC eases liquidity through reverse repos

Broad changes coming in finance, premier says

And growth is definitely slowing. The economy expanded at its slowest pace in 18 months in the first quarter. The 7.4 percent rate was below the 7.5 percent full-year target mentioned by Premier Li Keqiang.

Things didn't improve much in April. SouFun Holdings Ltd, which operates a property portal, said housing prices declined month-on-month in 45 of 100 cities, up from 37 cities in March. Its sample of 25 major cities showed a sales plunge of 17.8 percent year-on-year in April.

On the macroeconomic front, the consumer price index was up 1.8 percent year-on-year in April, down from 2.4 percent in March. The producer price index fell 2 percent in April.

The HSBC Flash China Manufacturing Purchasing Managers Index recovered to 49.7 in May from April's final reading of 48.1, beating a Reuters poll forecast of 48.1. But it remained below the level of 50, which separates growth from contraction, indicating that manufacturers experienced a slight drop in business.

Shen Jianguang, chief economist with Mizuho Securities Co Ltd, said via microblog on Monday that a reserve ratio cut would be the best macroeconomic means to avoid a hard landing.

Lu Zhengwei, chief economist at Industrial Bank Co Ltd, said much the same thing via Weibo, stating that a reserve ratio cut would help lower medium-to long-term funding costs, which would boost growth.