By Zheng Lifei (China Daily)
Updated: 2007-08-01 08:27

China's regional financial stability has generally improved in 2006 thanks to robust economic growth, a central bank report said yesterday.

The vibrant economies in the east, central, west and northeast parts of the country, which grew 17, 16, 18 and 15 percent year-on-year respectively last year, have laid the foundation for regional financial stability, the China Regional Financial Stability Report said.

Banking reforms, the active financial and capital markets and the government's efforts to improve the financial environment all contributed to a more stable regional financial system, said the report, released by the People's Bank of China's Shanghai headquarters.

Foreign financial institutions' accelerating expansion into areas outside the coastal regions also helped.

Overseas banks established 30 operating entities by the end of 2006, which has boosted the financial market competition in these regions and improved their operating and management, the report said.

But there're other issues and more needs to be done to further improve the regional financial stability, the report said.

The government should take measures to improve the financial system in rural areas, facilitate direct financing and improve financing channels.