China's Premier Li calls for ongoing financial reform, as economy slows

China's Premier Li calls for ongoing financial reform, as economy slows
China's Premier Li Keqiang
PHOTO: Reuters

BEIJING - China's Premier Li Keqiang has called for continued reform of the country's financial system, while admitting the government faces significant obstacles to achieving its economic targets.

Li said the government should maintain prudent monetary and stable macro-economic policies, as the economy continued to face"downward pressure".

He was speaking to officials and financial professionals at a meeting to promote financial reform on Friday.

Li's comments, which were only released on Sunday, come a day before the Chinese government is due to release third-quarter gross domestic product (GDP) growth figures.

Many economists expect China to report that July-Sept economic growth dropped below 7 per cent for the first time since the global financial crisis.

On Saturday, Li said meeting this year's growth target of around 7 per cent was "not easy".

President Xi Jinping also acknowledged "concerns about the Chinese economy" but sought to allay them in a written interview with Reuters.

Li also said the government needed to move forward with financial market reforms while improving "the effectiveness of financial regulation", to prevent and resolve financial risks.

That included creating friendly policies for financial institutions to write off bad debt.

China also needed to push forward interest rate liberalization and complete renminbi exchange rate mechanism to keep the exchange rate basically stable on a reasonable level, Li said.

Li also called for financial institutions to maintain sufficient liquidity and growth of total credit, while supporting new and restructuring companies, including advanced manufacturing and start-ups.

"There is enough money in the pool, but the transmission to the real economy faces many systematic obstacles," Li said, "We need to rely on reform and opening up to solve the problem."

Among those attending Friday's meeting were Vice Premier Zhang Gaoli and Ma Kai, along with central bank governor Zhou Xiaochuan.

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