Financial reform to boost growth

Representatives of China's various financial sectors have held a joint press conference on banking system reform and economic development of the country.

Zhou Xiaochuan, the governor of the People's Bank of China and Shang Fulin, chairman of the China Securities Regulatory Commission, as well as heads of China's big four state-owned banks, met with journalists for a question and answer session, as part of the on-going 18th CPC National Congress.

Central bank governor Zhou Xiaochuan says macro-economic management policies have been effective. Under the cloud of the international financial crisis, China's economic growth has been stumbling and slowing down. He said the government has thoroughly studied the economic downturn and has taken the necessary measures to stabilize the economic situation. But he said that China still needs to be on guard against risks, while also encouraging diversity in the financial sector.

Zhou Xiaochuan, Governor, People's Bank of China, said, "We are calling for diversity in financial services. In this process, some risks may be inevitably transferred to non-banking financial institutions. In non-banking sectors, there are certain operating risks. However, financial activities of the majority of non-banking financial institutions are still under regulation. It's not like what happened in advanced economies, whose non-banking financial institutions are out of control. So, we need to have a correct reading of the current situation."

Zhou adds that macro-controls will be more flexible in the future to further boost economic growth.

Meanwhile China's top banking regulator, Shang Fulin says the country's banking sectors have strengthened their ability substantially to serve the needs of the real economy. He says China will further open up the banking sector to private investors.

Shang Fulin, Chairman, Chinese Banking Regulatory Commission, said, "In front of the legal terms, the barriers have been cleared for private capital to enter the banking sector. And the entrance benchmark is unified towards state-owned and private capital. And we will continue to take measures to encourage more private capital to enter the banking system."

China's financial authorities also say they will further liberalize the financial sector, speed up reforms regarding market-based interest rates, and widen the use of the yuan in international trade and investment.