Premier Wen Jiabao's warning of a difficult first quarter and the need for monetary policy adjustments is fuelling expectations of cuts in the bank reserve ratio.
Economists said the ratio of reserves that banks are required to set aside when lending could be cut before the Lunar New Year on January 23, as the mainland economy runs the risk of growing at its slowest pace in a decade amid the spiralling euro-zone crisis and persistent weakness in the US economy.
Wen's bearish tone for the first quarter sent stocks in Hong Kong and Shanghai lower yesterday.
The Hang Seng Index lost 150 points, or 0.8 per cent, to 18,727.31 while the Shanghai Composite Index dropped 30 points, or 1.4 per cent, to 2,169.39, on its first day of trading this year.
UBS economist Wang Tao said the decline in exports had become more obvious and the property market was entering 'a wintry season'.
This could push the mainland's economic growth to as low as 7.7 per cent in the first three months of this year, compared with an estimated 8.6 per cent for the fourth quarter of last year.
'This will trigger more visible policy easing and in turn lift domestic investments and economic activity from the second quarter onwards,' she said.