Vice-Premier Wen Jiabao has urged China's financial sector to open up gradually and strengthen supervision to ensure its safety, efficiency and stability.

Wen, also a Standing Committee member of the Political Bureau of the Communist Party of China (CPC) Central Committee, made the remark at a national conference on banking, securities and insurance in Beijing on Friday.

He stressed that the financial sector served as the core of the modern economy, and it was important to push forward financial reform, open up the sector, and build a modern financial system and companies.

"We must conscientiously follow economic and financial rules and exercise administration and supervision according to the law, and the financial sector must correctly strike a balance between minimizing financial risks and fuelling economic growth," the vice-premier said.

Party-building and honest governance within the financial sector should be strengthened to guarantee reform and development, he said.

Wen said both the latest changes in the international economic and financial situation and China's reform, opening-up drive and new economic tasks required the country to secure its economic and financial stability and safety, upgrade its financial competitiveness and take precautions to reduce financial risks.

Wen listed this year's major tasks for the financial sector as further reducing the rate of non-performing debt, steadily advancing financial reforms, better supervising financial practices, gradually opening up the sector to the outside world, and improving financial services.

Reducing bad debt remained a vital task, said the vice-premier, who urged all regions and departments to work together to combat debt evasion in various forms.

The structure of credit should be optimized and new bad debt kept under strict control. The securities and insurance sectors should also improve the quality of assets and trim bad assets.

He urged wider reforms of state-owned commercial banks and insurance companies and the establishment of a shareholding system. Reforms of the rural financial system should accelerate to help support agriculture and the rural economy.

The vice-premier said the capital market should play an important role in industrial restructuring and reform of state-owned enterprises, encouraging social investment, and optimizing the allocation of financial resources.

One of the principal tasks will be to strengthen financial supervision, while rectifying and regulating the financial order and speeding up work on a social credit system.

Wen said China would step-by-step open its financial market to qualified foreign-funded financial organizations, and improve financial corporate governance through joint ventures and shareholdings by foreign investors.

Qualified Chinese financial companies are also encouraged to invest overseas or set up overseas branches.

In improving services, banks should give more credit support to projects backed by government bonds, enterprises with good credit ratings, agriculture, small and medium-sized enterprises, the development of western China, laid-off workers, and personal consumption.

(China Daily January 27, 2003)