The central bank said on Thursday that added liquidity gained from securitized assets will help boost growth in targeted areas.
The areas include credit support to small and medium-sized enterprises, agriculture, urban renovation, and infrastructure projects, according to a statement on the website of People's Bank of China.
On Wednesday, an executive meeting of the State Council, presided over by Premier Li Keqiang, gave the green light for high-quality securitized assets to be traded as a way to boost bank liquidity.
The move will help ease risks for banks and quench liquidity demand.
The products will be traded firstly on the inter-bank bond market in a trial stage, and will be gradually extended to more markets, such as stock exchanges, the spokesperson said.