A State Development and Reform Commission senior official said Wednesday that one direction for China's next step of reform is to let the market play the major role in financing.

But Jiang Weixin, vice minister in charge of the commission, acknowledged that "it was an arduous thing" at a press conference held by the Information Office of the State Council.

He said the decision on reform of the investment system, issued recently by the State Council, or China's cabinet, means "a big step forward" in market-oriented financing.

Enterprises of different ownership are allowed to issue equities as a source of investment funds and a pilot package will be launched on issuing convertible bonds and shares to the public to finance basic facilities foreseen to yield stable profits, according to the decision.

And enterprises are encouraged to diversify and enlarge the scale of their bonds on condition of stringently controlling risks.

Jiang said commercial banks should decide on their own whether to extend loans or not, which is also an important part of the cabinet decision.

Bank loans, however, should be confined in line with the State's industrial policies, which are issued annually or once over a period of time, he added.

Credit and loans flowing to such industries as iron and steel, cement and aluminum are being capped under current economic macro-control, but it does not mean these sectors will never be granted loans, Jiang Weixin said.

Source: Xinhua