The article examines how monetary policy in China affects the economy using a special model. It shows that China's monetary policy impacts output growth and inflation similarly to advanced economies. Bank loans are not influenced much by policy changes, so window guidance is still important. Stock prices react differently to tightening and easing of monetary conditions, with easing boosting stock prices but tightening having no effect. This suggests that monetary policy may not be effective for stabilizing asset prices, which has implications for financial stability and policies.