China ends financial meeting, urges serving real economy amid risks

BEIJING, Jan. 7 (Xinhua) -- China's financial policy makers concluded a two-day national financial work conference on Saturday, elaborating the country's financial philosophy and outlining the sector's policy priorities in the coming five years.

"China's economy has maintained stable and relatively fast growth with stabilized consumer prices and improvements in people's lives. The financial system is running steadily. The good momentum of economic and social development remains unchanged," Premier Wen Jiabao said at the meeting.

For the future, the financial industry must serve the real economy, improve real economy's access to finance and prevent overspeculation and virtual bubbles from inflating the economy, Wen noted.

Supervision over the financial sector must be strengthened to prevent systemic risk, Wen said, calling for the banking institutions to establish a more complete and prudent risk monitoring regime.

The equity markets should also enhance regulation to better protect investors' legal rights and interests, he said.

As for the local government financing vehicles (LGFVs), the premier noted that local government debts are "generally safe and controllable", in an attempt to dispel worries over possible insolvency of local governments.

Wen said the revenues and spendings through the LGFVs will be included in the government's budget management while a mechanism will be established to control the gross local government debts through a risk-warning arrangement.

The premier reiterated that China's financial system is running on a stable course despite the global financial crisis.

"We have the confidence, capabilities and conditions to move our economic growth to a new stage," he said.

China has resolutely pushed forward a series of financial reforms which have set significant historical milestones. Large commercial banks have remarkably improved their capabilities of guarding against risks, Wen said.

"We should especially note that the global financial crisis has not yet ended. We should strengthen our awareness of risks and responsibilities in order to push financial work to new levels," he said.

Wen voiced his support for the development of financial innovation, but stressed that this should not avert supervision or escape the real economy. "Risk-aversion should be the lifeline of our financial work," he said.