China needs to lean toward a tighter monetary-policy stance as the economy faces risks from excessive liquidity and credit, according to a research unit of the nation's top economic-planning agency.

Authorities should drain more cash from the financial system to manage liquidity, and regulators need to enhance said banks' off-balance-sheet business, the State Information Center, a research arm of the National Development and Reform Commission, in a report published on Wednesday in the China Securities Journal.