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 Friday.

    Li’s comments, which were only released Sunday, come a day before the Chinese Government released third-quarter gross domestic product (GDP) growth figures.

    On Saturday, Li said meeting this year’s growth target of around 7 percent was “not easy.”

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

    Xi said that the economic slowing was normal as a part of structural adjustments, as the government seeks to wean it off an over-reliance on investment in infrastructure and housing and to develop new drivers of growth, such as the services sector and high-tech industry.

    Xi said in the written interview that the monetary easing steps China had taken to date, as well as its adjustment to the exchange rate mechanism for the yuan in August, which was accompanied by a devaluation of the currency, had helped to defuse risks.

    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.

    (SD-Agencies)