Conventional vs innovative monetary policy transmission in China: Term-structure and credit-spread effects

China’s monetary policy relies on multiple instruments whose design features imply distinct asset-pricing transmission. This paper constructs high-frequency monetary policy surprises separately for conventional tools (reserve-requirement and benchmark lending-rate actions) and innovative tools (medium-term lending facility operations and loan prime rate adjustments). I extract the common component of repo- and swap-rate surprises within disjoint announcement sets to obtain regime-specific shock series. Conventional surprises are priced primarily at the front end of the Chinese government bond yield curve, consistent with repricing of near-term expected short rates. Innovative surprises exhibit a hump-shaped maturity footprint, with stronger responses at intermediate maturities, consistent with revisions to medium-horizon expectations and/or term-premium channels. Linking risk-free repricing to risky credit, I show that conventional shocks modestly widen credit spreads, whereas innovative shocks compress spreads strongly and broadly. Joint accounting of yield and spread responses implies that, for innovative shocks, spread compression dominates risk-free repricing and delivers economically meaningful reductions in all-in financing costs, especially for local government bonds. Overall, the evidence indicates that instrument design shapes both the cross-maturity pricing of duration risk and the pricing of credit risk in China’s bond market.