Hit by the unprecedented COVID-19 pandemic, China needs a mechanism that better ensures effective policy implementation in real economy at the grassroots level, said Zhou Xiaochuan, former governor of the People's Bank of China, in a keynote speech at 2020 Tsinghua PBCSF Global Finance Forum, an annual forum, which was moved online this year due to the pandemic's influence, held in Beijing on Saturday.

Under the pandemic, China has applied monetary policy in time to encourage needs and offer assistance, he said, noting the policy worked well in general.

However, unlike the previous crisis which caused problems in the financial sector at first, the major damage brought by the pandemic is on the small and medium-sized enterprises (SMEs), leading to unemployment, Zhou said.

Therefore, the financial service should be more "down to earth," he said, underlining better implementation at the grassroots level and financial service's cooperation with fiscal policies.

He elaborated on the implementation suggestion with the roles of China's policy lenders and commercial banks should have in the fight against the pandemic.

China's policy lenders could have taken the task of offering supports, but they do not have enough information about SMEs, while the commercial banks are unable to do so without supervision, he said, suggesting a more complete and clear accountability mechanism is needed.