China's regulators should be vigilant for financial risks and continue to push deleveraging to ensure healthy and steady economic growth, members of the country's top political advisory body said on Monday.
Yang Kaisheng, a member of the National Committee of the Chinese People's Political Consultative Conference, said regulators should strengthen supervision of investment products and trading activities that exist in the regulatory void.
Yang, former president of Industrial and Commercial Bank of China, said the risks in China's financial industry are under control, but regulators should increase the penetration of regulation.
Yang said the Chinese banking industry is capable of guarding against the potential risks and losses from non-performing loans, since the industry has maintained an NPL provision coverage ratio of more than 170 percent.
Qian Yingyi, dean of the Tsinghua University School of Economics and Management and a member of the CPPCC National Committee, said the government should strike a fine balance between maintaining stable growth and pushing financial deleveraging.
"Growth stability should be the first and foremost issue. Pushing the financial deleveraging too hard could run the risk of causing sharp volatilities in the short term," he said.
The government has set the growth target for this year at around 6.5 percent, which is interpreted by economists as an indication that the growth-reform trade-off has tilted toward reform.
Li Yining, a leading economist at Peking University and a member of the CPPCC National Committee, said, "Whether we can achieve a growth rate higher than 6.5 percent this year depends on the efficiency of the economy."