T

he government work report delivered at the annual session of the National People's Congress,or parliament,called for a greater effort to ensure that the 13th Five-Year Plan (2016-2020) got off to a good start. It targeted a reduction in overcapacity in certain struggling sectors as well as reducing inventories,cutting costs for business and deleveraging - or trimming debt. Premier Li Keqiang also pointed to the importance of guarding against financial risk. Accelerating China's economic transition will inevitably put more pressure on the financial system. What is the outlook for financial risk in China? And how we should we carry out changes in financial regulation so that our financial system can promote economic growth and a transformation of the economic structure?

Zhong Wei,deputy editor-in-chief of China Forex Magazine,speaks to Ba Shusong,chief economist of the Hong Kong Stock Exchange and the China Banking Association,and He Fan,chief economist at Caixin Think Tank.

Zhong Wei: Welcome to this roundtable discussion. China's banks have long been the mainstay of the financial system. They have enjoyed an extended boom,helped by repeated replenishments of capital to support lending even as they make greater provisions for loan losses. The net result has been a fairly good return on assets and comparatively low levels at least on a percentage basis -- of non-performing loans. But with China＊s economic slowdown and a prolonged effort to promote economic restructuring,the banking sector has been facing growing pressure. In your opinion,what's the outlook for profitability for the nation's banks and how does asset quality compare to banks elsewhere? With more market-based domestic interest rates,a more flexible exchange rate for the nation's currency and policy changes such as permission for debt-to-equity swaps,how much more pressure will there be on bank profitability? And how long will this pressure last?