Chinese premier calls for financial reform push

Premier Wen Jiabao on Monday called for the government to push forward financial reforms.

During a Monday inspection tour of the People's Bank of China, the country's central bank, Wen said efforts should be made to advance the market-based reform of interest rates and improve the yuan exchange rate formation mechanism.

To gradually make the yuan convertible under the capital account, the government should also work to expand the use of the yuan in cross-border trade and investment, Wen said.

Cross-border capital flow is controlled in China, as its capital account is only partially convertible, which has acted as a technical barrier for the yuan to become a global reserve currency.

The government has been taking steps to ease capital controls, introducing reforms such as more flexible interest rates and the adoption of a wider floating band for the yuan against the U.S. dollar.

Wen also urged government efforts to encourage market-oriented financial innovations, boost the role of financial institutions of all kinds and step up the development of private financial institutions.

To regulate underground private financing, the government in March 2012 set up a pilot financial reform zone in the eastern city of Wenzhou to encourage the participation of private capital in reforms of local financial institutions.

While warning of a complicated economic environment, the premier said the government should make its monetary policy play a key role in sustaining the economy's growth, stabilizing consumer prices and preventing financial risks.