Wen Jiaobao: financial reform most crucial part of economic reforms

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Last updated at: (Beijing Time) Monday, November 24, 2003

Wen Jiaobao: financial reform most crucial part of economic reforms

Financial reform is the most crucial part of China's overall economic reforms, said Chinese Premier Wen Jiabao when he was interviewed in Beijing by The Washington Post of the United States.

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Financial reform is the most crucial part of China's overall economic reforms, said Chinese Premier Wen Jiabao when he was interviewed in Beijing by The Washington Post of the United States.

In response to a question by Leonard Downie, executive editor of The Washington Post, Wen said that as is known to all, the financial sector in China has been plagued by many problems. The biggest problem is the fairly high proportion of nonperforming loans from banks, he said, adding there exists significant risk.

He said the problem is caused by defects in the system. "So we have to accelerate the reform of the banking system," he said.

"Our aim is to put in place a modern banking system whereby the commercial banks will be commercial banks in the true sense of the word. That means they will be responsible for their own operation decisions and they will be held responsible for their profits and losses," said the premier.

"On our part, we will help create conditions to introduce corporate governance to the banks through the share-holding system. Those that meet the conditions can go public or be listed," he said.

"You also touched upon an important point, that is to ensure there will be more financing in support of small and medium-sized enterprises and also the privately run enterprises," he said.

"I have to admit that not enough has been done in this field, even though the small and medium-sized enterprises play a very important role in creating job opportunities and in providing employment," he said.

"So while we step up regulation and improve our capability to avoid financial risks, we should make sure that the banks would provide more financing and support of these small and medium-sized enterprises," the premier said.

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