The mainland's central bank released the blueprint for the financial sector for the five years to 2015 yesterday, setting the tone for long-awaited financial reforms.
The 12th five-year plan for the financial sector, endorsed by the State Council recently, says the country will "steadily" pave the way for reforms such as the liberalisation of interest rates and exchange rates, the convertibility of the yuan under the capital account and guiding private capital to invest in financial companies, according to the document released by the People's Bank of China.
By 2015, the target is for the financial sector to reach 5 per cent of gross domestic product, up from the average of 4.42 per cent from 2000 to 2010.
Direct financing by non-financial firms, mainly through bond issues and stock offers, should account for more than 15 per cent of all financing, up from the average of 11.08 per cent in the five years to 2010, the plan said.
The mainland has been trying to reduce firms' reliance on bank loans, which has led to over-expansion of bank assets and an unbalanced distribution of funds.
"It's good that the government has set quantitative targets for direct financing and the financial sector's share of GDP," said Lu Zhengwei, an economist at Industrial Bank. "However, it has not unveiled a timetable or delivered any goal for the exchange rate reform and interest rate liberalisation, which are the biggest concerns of investors."
Dai Xianglong, head of the National Council for Social Security Fund, said last week that the country would probably "make a breakthrough" in opening up its capital account in three to five years, "if there is no crisis in other economies".
The blueprint said Beijing would support Hong Kong's development as an offshore yuan centre and global asset management hub and help promote its role as an international financial centre.
It said the government would accelerate the pace of turning Shanghai into an international financial centre while enhancing co-operation with Hong Kong.