According to the central bank, China spending CNY 4 trillion on a stimulus plan, may take preemptive'' measures to revive growth as the financial crisis increasingly takes its toll on the economy.

The bank said the People's Bank of China will be flexible and has ample room' for policy changes. It will ensure money supply liquidity. The global financial markets are in severe turbulence, world economies are seriously shocked and the negative impact on China is emerging and intensifying. The impact on China shouldn't be underestimated.

Mr Xing Ziqiang an economist at China International Capital Corp said in Beijing as capital inflows decrease amid the financial crisis, the central bank is worried about liquidity in the financial system. The central bank may cut reserve ratios for banks by the end of this year and also trim lending rates further.

China's central bank has cut interest rates three times since September and removed controls on bank lending to support small businesses and fund the building of railways, airports and roads. It didn't specify what measures it may take to bolster the world's fourth-largest economy in today's statement.

The bank said China has various contingency plans, adding that it will ensure sufficient liquidity in the financial markets by reducing open market operations and increasing fund supply. It said the government may take more measures to boost domestic consumption, expand fixed-asset investment, and increase spending.

The central bank said the weakening property markets may drag down growth and plunging stocks are trimming households' income, adding to the downside risks of China's growth just as the world economic slowdown slashes exports. It said measures should also be taken to ensure rational investment in real estate which is key to spurring consumption of steel, raw materials, appliance and to the health of the financial industry.

The central bank said China faces deflationary pressure in the short-term after the rate of inflation slowed for six consecutive months. It said still, capital injections by central banks worldwide and expected future increases in China's labor and energy prices may lead to inflationary pressure over a long term.