The move, the second since April aimed at slowing the world's largest and fastest-growing developing economy, sent ripples of concern through international markets. A slowing of the economy could soften commodity prices and crimp some multinationals' sales in China.

The People's Bank of China said it will lift its reserve-requirement ratio for commercial banks, effective early next month, by half a percentage point to 8%. The reserve requirement refers to the percentage of deposits that banks must set aside and not lend; a bank lending the equivalent of $100 would have to set aside $8 in reserves, thus limiting the amount it can lend.

"It's just freezing the liquidity," said Jonathan Anderson, UBS AG's chief regional economist in Hong Kong. "The real impact is to get banks to start slowing [lending] up."

The move follows the release of data that showed China's M2 money supply, a measure of how much cash is circulating in the financial system and an indication of inflation risks, expanded by 19.1% in May when compared with last year, while lending in yuan increased 16% in May-even after lending rates were lifted in April for the first time since 2004.

Though money-supply growth was up only moderately from 18.9% in April, it was the fastest pace since January, when M2 grew 19.2%, a month when the measure was likely driven by the onset of the Lunar New Year. Otherwise, May's figure was the highest year-to-year rate for money-supply growth since April 2004.

China's leaders are increasingly concerned that a surge of loans is prompting excessive investment, which in turn could spill over to higher prices.

To sign up for The Wall Street Journal Briefing please visit http://www.briefing.wsj.com/hktdc.