Trade tensions and policy uncertainties are the prominent risks facing the global economy, the People's Bank of China (PBOC) said in a report on the implementation of monetary policies in the first quarter.

In the report, in terms of the global economy, China's central bank warned that uncertainties brought by trade frictions between China and the United States could have "an adverse impact."

The report cited that the impact on global supply chains has started to bite. Some business decisions were being put off and the disruption of supply chains has led to the slowdown of external demand for some countries.

The report projected that trade tensions and policy uncertainties would further drag down the global economy through high inflation, damage to the sentiments of families and enterprises, and volatility of the financial market.

In the meantime, the PBOC said it would make efforts to support the domestic economy amid the trade friction with the United States. For instance, the central bank would further reduce financing costs for the real economy especially small firms, and increase the ability and willingness of financial institutions to serve the real economy.

Ma Jun, a member of the Monetary Policy Committee at the PBOC, said that escalating trade tensions would have a limited impact on China's economy, adding that on an estimate, the impact may only push China's GDP growth back by 0.3 percentage points.

In Ma's perspective, the more proactive fiscal policy and improved monetary condition could strengthen the real economy.

"Now we have very strong tax cuts, which I think is much stronger than the U.S. tax cuts, and we have some easing monetary conditions due to six reserve requirement cuts during the last one and a half years. We have also made some adjustments to regular policies including curbing shadowing banking activities and fostering PPP projects, all these would make funding more available to companies especially in the private sector," Ma explained.

Ma is confident about the market's resilience to external fluctuations, thanks to current domestic macro economy along with the sound policy environment. "I believe Chinese ability to endure additional external shocks is now stronger than years ago," Ma told CGTN.