"China has increased imports, which would help rebalance its international payments.

High-ranking Chinese officials, such as central bank Vice-Governor Yi Gang, have vowed to reduce the ratio of the country's current account balance - the trade balance - over its GDP from the current 6 percent to 4 percent.

China's trade surplus narrowed to $16.9 billion- the smallest in five months - in September because import growth overtook export growth.

Sun also warned the yuan's appreciation will jeopardize the massive foreign exchange reserves' value, because it will cause them to shrink in terms of the dollar.

"The US is, in a sense, trying to reduce its debt to China through pressuring (China) to appreciate its currency," he said. "China must develop strategies to use its reserves more wisely."

The central bank also said Chinese banks extended a net of 595.5 billion yuan in new yuan-denominated loans in September, compared with August's 545 billion yuan.

"The pressure on policymakers from increasing liquidity remains," Zhuang from the ADB said.

China recently decided to temporarily raise reserve requirements, or the money commercial banks must keep in reserves, for six major lenders. The move indicates "policymakers' worries about liquidity", Sun said.

But the West's gloomy economic outlook is likely to limit further tightening by China, Moody's Analytics Senior Economist Matt Robinson said. "Weak job growth in the US and fiscal austerity in Europe will dampen near-term consumer demand for Chinese exports."

Moody's Analytics expects no sharp tightening by authorities in 2010's final months.

"The government will (instead) try to strike a balance between insulating China's economy from global weaknesses and keeping the domestic housing market from rebounding," Robinson said.