China's Premier Li Keqiang Calls For Continuing Financial Reform Amid Economic Slowdown

BEIJING -- China's Premier Li Keqiang has called for continued reform of the country's financial system, while admitting the government faces significant obstacles to achieving its economic targets. Li said the government should maintain prudent monetary and stable macroeconomic policies, as the economy continued to face "downward pressure."

Li was speaking to officials and financial professionals at a meeting to promote financial reform Friday. His comments, which were released Sunday, came a day before the Chinese government is due to release third-quarter figures on growth in its gross domestic product (GDP).

Many economists expect China to report that its economic growth last quarter dropped below 7 percent for the first time since the global financial crisis. Saturday, Li said meeting this year's growth target of around 7 percent was "not easy."

President Xi Jinping also acknowledged "concerns about the Chinese economy," but sought to allay them in a written interview with Reuters.

Li said the government needed to move forward with financial-market reforms while improving "the effectiveness of financial regulation" to prevent and resolve financial risks. That included creating friendly policies for financial institutions to write off bad debt.

China also needed to push forward interest-rate liberalization and complete the renminbi exchange-rate mechanism to keep the exchange rate basically stable on a reasonable level, Li said.

Li called on financial institutions to maintain sufficient liquidity and growth of total credit, while supporting new and restructuring companies, including advanced manufacturing and startups.

"There is enough money in the pool, but the transmission to the real economy faces many systematic obstacles," Li said. "We need to rely on reform and opening up to solve the problem."

Among those attending Friday's meeting were Vice Premiers Zhang Gaoli and Ma Kai, as well as central-bank governor Zhou Xiaochuan.

(Reporting by Matthew Miller and Shu Zhang; Editing by Jon Boyle)