China Financial Sector Assessment Program reports published by the IMF and the World Bank on November 15 applauded the progress China has made in its transition toward a more commercially oriented and financially sound system.

But the reports also warned that the country faces a steady build-up in vulnerabilities and listed interest and exchange rate reforms as top priorities.

The People's Bank of China, the central bank, said that the reports are generally objective, positive and affirmative and that suggestions are constructive. However, certain views in the report are not sufficiently comprehensive or objective.

The central bank said specific timing and sequence of several proposed reforms should be based on further research of the country's actual conditions.

China has made great progress in interest- and exchange-rate reforms, and market mechanisms have played a fundamental role in the formation of China's interest and exchange rates, the central bank said, adding that the country will remain flexible in promoting reforms based on the country's conditions.