(Yicai Global) Dec. 5 -- New policies making funding more accessible to Chinese companies are improving the financial environment but will not eradicate defaulters, according to a Moody's Investors Service executive.

Yields on corporate three-year notes have been falling recently, which means cheaper financing for Chinese bond issuers and easier access for medium-quality debtors, Li Xiujun, deputy director of credit strategy and standards, said at the Moody's & CCXI 2019 China Credit Outlook Conference in Beijing yesterday.

But low-quality bond issues, such as companies with high leverage and small property developers, are still at risk of default, he added.

Beijing has been gradually making adjustments toward deleveraging and risk reduction through a range of new policies, Li said, adding that this points to the central government's support for domestic demand through more relaxed regulations, balanced liquidity and an improved credit environment, which could propel the economy.

There have therefore been multiple targeted cuts to required reserve ratios, more standardization and opening up of the financial market, reductions in taxes and fees, more frequent input in infrastructure construction, consumption stimuli and several policies for credit support in the private sector, Li said, adding that these changes do not represent a long-term policy adjustment.

Short-term risks may have caused the current market instability and made policy regulation more difficult, Li continued, saying China's policies now need to fulfill two roles: supporting up the economy while continuing reforms.