(Bloomberg) -- China’s central bank chief said that the nation’s growth rate has tumbled “a bit” too much and that policy makers have scope to respond, underscoring forecasts for further monetary easing in the world’s second-largest economy.

“China’s inflation is also declining, so we need to be vigilant to see if the disinflation trend will continue, and if deflation will happen or not,” People’s Bank of China Governor Zhou Xiaochuan, 67, said Sunday in remarks at the Boao Forum for Asia, an annual conference on the southern Chinese island of Hainan. “China can have room to act,” both with interest rates and “quantitative” measures, he said.

And:

China’s leadership is trying to wean the economy off debt-fueled property investment and old-line polluting industries, shifting toward services and domestic-consumption led growth. While President Xi has repeatedly said his nation is comfortable with a “new normal” of less-rapid expansion, officials are also wary of the slowdown weakening too much.

The economy expanded 6.28 percent in February from a year earlier, Bloomberg’s monthly growth tracker shows, and the government’s official factory reading due Wednesday likely worsened, according to economists surveyed by Bloomberg.

David Fuller's view

This article confirms China’s monetary stimulus which is bullish for Chinese equities for so long as it persists.