China will intensify pilot regional financial reforms to enhance the role of finance in supporting reform, opening-up and economic growth, the State Council decided at an executive meeting on Wednesday.

(Photo: VCG)

Attendees at the meeting, at which Premier Li Keqiang presided, urged a coordinated implementation of policy tools to effectively bring down real interest rates, support the growth of mid-size and small banks, and lower financing costs for businesses with micro and small firms. Furthermore, local governments must fulfill their responsibilities and curb financial risks, attendees said.

In the pilot reforms, priority will be given to financial support for agriculture, rural areas and farmers, and technological innovation, as well as further financial opening-up. Practices proven effective in the pilot reforms will be rolled out to places where conditions are ripe.

"The financial system is of a macro nature that affects almost all facets of the economy," Li said. "Our first-order task is to ensure that the macro policy is well calibrated and implemented to continuously bring down real interest rates and financing costs for businesses, especially small and medium-sized firms."

Attendees at the meeting decided to establish a working mechanism that allows dynamic adjustments. Follow-up evaluation and third-party assessment of the reforms will be enhanced. Any pilot reform that delivers few concrete results or seriously deviates from the reform objectives must be promptly redressed or halted. No do-nothing pilot reform will be allowed.

Regions where pilot reforms have met their objectives and delivered notable outcomes will be encouraged to explore new reforms. Their effective practices shall be applied in wider areas at a faster pace so that financial reform, opening-up and innovation can better boost development, improving people's lives and averting risks.

"Regional financial reforms and innovations need to follow macro policy and serve the greater good," Li said. "Local governments must fulfill their due responsibilities in supporting the growth of small and medium-sized companies and coordinating the macro policy with the needs of regional development."