The loan prime rates, China's market-based benchmark lending rates, may decline in the second half as the central bank tamps down financing costs in order to spur credit demand and alleviate financial risks facing the property sector, they said.

Their remarks came after emerging signs that China's economic recovery may have slowed due to lukewarm market demand, a subdued housing market and renewed COVID-19 cases.

To consolidate the economic recovery, the People's Bank of China, the country's central bank, pledged at a meeting on Monday to amplify support for enterprises' credit expansion and bring the role of effective investment further into play.

Efforts will be made to maintain steady loan growth, promote declines in real lending rates while keeping them overall stable, and make good use of financial tools to support infrastructure construction, the central bank said in a statement after its midyear work meeting.

The central bank will also keep financing of the property sector stable and implement differentiated credit policies based on the conditions of local property markets, as part of its efforts to resolve risks in key areas, the statement said.

Experts said the statement indicates that expanding domestic demand and resolving property sector risks will be at the top of the central bank's agenda, following a contraction in China's manufacturing activity last month that points to slower economic momentum.

The official manufacturing purchasing managers index dropped to 49 in July from 50.2 in June, which experts attributed to weakening market demand, including in the property sector.

Zhu Haibin, JPMorgan's chief China economist, said it is critical for the central bank and other authorities to step up efforts to mitigate the liquidity woes facing property developers to prevent major risk spillovers into other sectors of the economy.

"A property sector downturn could have far-reaching ramifications for the whole financial and economic system that are much bigger than the impact of nonperforming loans in the banking system," Zhu said.

It is therefore necessary to ramp up funding support to real-estate developers on a case-by-case basis to ensure the completion of housing projects underway and to stabilize homebuyers' confidence, he said.

The central bank also vowed to maintain financial market stability at the Monday meeting, which was followed by a slide in Chinese equities on Tuesday. Due to a rise in geopolitical uncertainties, the benchmark Shanghai Composite Index shed 2.26 percent to Tuesday's close at 3,186.27 points.

With controllable inflation allowing the country's monetary policy to remain accommodative, China's economic growth may outpace the world this year and attract more global funds into the nation's capital market, said Channel Yeung, a market analyst at financial trading platform FXTM.