Financial reform 'key move'

The ambitious plan, believed to be a blueprint for the plenum's final communique, also stresses five key reforms.

The first addresses the structures of property rights and management of financial agencies by lowering the entry threshold to boost financial market competition.

The second promotes the marketization of interest rates and exchange rate formation.

The third establishes an efficient and flexible market-oriented financial system to support a growth model shift and urbanization.

The fourth should solve and manage potential financial risks by administrations and institutions.

And the fifth coordinates fiscal and tax reform, and factors price reform to maximize the synergistic effects.

The previous financial system reform focused mainly on micro-financial agencies.

Experts believe the new reform will pay more attention to establishing relevant institutions, creating a better financial market environment, improving financial resources' allocation efficiency and underscoring the financial sector's support for the real economy.

"I think the Third Plenum will draw up a top-level design and an overall plan to carry on the market reform momentum of the financial sector and integrate previous patchworks in various fields," said Zhao Qingming, a senior researcher at the China Construction Bank.

Removing the systematic barriers to allocating financial resources in the market are the targets of the next round of financial reform in order to release the vitality of the financial system, disperse financial risks and give powerful support to the real economy.

Hu Xiaolian, deputy governor of the People's Bank of China, recently indicated the three missions of liberalizing the interest rate: to set up a self-disciplinary mechanism for the pricing of the market-oriented interest rate; start the loan prime rate quotation; and promote the issuance and trade of inter-bank deposit receipts. Now that the first two have been accomplished, the next step is to end the control over the deposit interest rate.

With the central government pledging to push private capital to enter the financial industry, and some private enterprises actively applying to start private banks, that capital will probably have more access to the banking industry after the plenum.

Thus, the cash-thirsty private enterprises can get more financial support through direct financing. And room for covert deals and shadow banks will grow smaller and smaller.