By tinkering with liquidity management tools
Through the use of a wide range of monetary instruments, the PBOC is attempting to meet two seemingly conflicting goals at once -- weed out excessive borrowing in the financial system while ensuring credit to an economy that's on a long-term slowdown. The need to maintain the balance is especially acute amid the political sensitivity around the approaching leadership transition of the 19th Party Congress in the fall.
Bloomberg with a good article on that here.
