China has unveiled plans to reform the financial sector to serve the real economy while guarding against systemic risks.

President Xi Jinping, at a two-day National Financial Work Conference that ended on Saturday, said China must strengthen the Party’s leadership over financial work, stick to seeking progress while maintaining stability, and respect the rules of financial development.

The conference, which has been held every five years since 1997, is widely considered to set the tone for financial reforms.

Three tasks were highlighted at the meeting — making the financial sector better serve the real economy, containing risks and deepening reforms.

Serving the real economy is the duty and purpose of the sector and the fundamental way to guard against risks, Xi said.

The sector should improve service efficiency and quality and channel more resources into major and weak areas of economic and social development, he added.

Developing direct financing will be prioritized while indirect financing structure should be optimized by accelerating strategic transformation of state-owned major banks and developing small and medium-sized banks and private financial institutions, he said.

Li Huiyong, a senior analyst with Shenwan Hongyuan Securities, said the reiteration of the role of the financial sector points out the direction of its development and the emphasis on direct financing is also reassuring for the stocks and bond markets.

Xi also said guarding against systemic financial risks is the ongoing theme of financial work and the government should take stronger initiatives to monitor, warn against and deal with risks in a timely manner.

China will accelerate developing laws and regulations governing the financial sector, improve macroprudential management and emphasize functional as well as behavioral regulation, he said.

The government will continue to deleverage the nation’s economy by taking a prudent monetary policy and prioritizing reducing leverage in state-owned enterprises.

The country will also deepen financial reforms by improving financial regulation coordination and shoring up weak links in supervision.

China is to set up a committee under the State Council to oversee financial stability and development and the central bank will play a stronger role in macroprudential management and guarding against systemic risks, Xi told the conference.

Lian Ping, chief economist at Bank of Communications, said such a committee will help improve the effectiveness of regulation and address challenges brought by increasingly mixed financial services.

Premier Li Keqiang said reform of the financial regulation framework should be based on domestic conditions and all financial businesses will be supervised.

Li said China will also increase efforts to improve the legal framework, credit mechanism and talent development for the financial sector to help the economy expand steadily.

Xi said the country would further open up its financial market to promote the internationalization of the yuan and capital account convertibility at a steady pace.