China will step up financial reform in the coming five years in a bid to perfect its market economy, according to a document of the Communist Party of China (CPC) issued in Beijing Tuesday.

Joint-stock reform of state-owned financial businesses, reform of policy banks, and the development of medium-sized and small financial businesses with diverse forms of ownership will be highlighted, says the proposal of the CPC Central Committee for formulating the 2006-2010 national program for economic and social development.

The document urges financial institutions to improve corporate governance structure, strengthen internal control, improve the quality of their assets, profitability and services.

Securities, bond and other forms of capital markets should be developed together with money, insurance and futures markets. The financial regulatory system should also be strengthened to cope with financial risks.

Efforts should be made to steadily promote market-oriented interest rate reform, improve the managed floating exchange rate system, and gradually realize the convertibility of the Chinese currency under capital account.

"We must maintain financial stability and security," says the proposal.

The documents also calls for efforts to reform the administrative system, the finance and taxation systems, build a modern market system, change the growth mode of foreign trade and promote foreign economic and technological cooperation.

Source: Xinhua