(Yicai Global) Sept. 19 -- China's finance sector has continued its opening this year in an effort to solve its conspicuous problems, Liu Shijin, a famous Chinese economist, vice chairman of China Development Research Foundation, and ex-vice president of the Development Research Center of China's cabinet, the State Council, said yesterday.

Liu made these remarks in a speech to the Yicai session of China's Financial Opening' at the Summer Davos Forum underway in the eastern Chinese city of Tianjin.

Some areas of China's financial system still lack efficiency and its market accessibility and efficiency are not high and need enhancement, he stressed.

He cited China's financial sector as an example, saying that it makes up 8 percent of its gross domestic product while "that of the so-called strong financial powers -- the US and the UK -- are only 7 percent. China's financial sector weighs too much on GDP, and banks' profits are nearly half of those of all listed companies. China further boasts 121 companies in the global top 500, slightly fewer than the US, but banking sector profits constitute almost half the total, indicating a problem with the Chinese banking sector's market accessibility. Opening up may solve some problems in this regard," Liu advised.

Small and medium-sized enterprises still have difficulty in securing and incur high financing costs, Liu also noted. Whether introducing new financial models or products through opening is possible is worth considering. High value-added industries need upgrading during China's economic transformation and determining which financial models and instruments benefit transformation and upgrading is also necessary.

China must control its degree of openness and learn from emerging markets' opening of their financial markets years ago, such as with cross-border capital flow management, he added.

China must actively continue its granting of financial access in an orderly manner and combine this with stricter oversight to promote its economic growth and financial stability, Yi Gang, China's central bank governor, recently said in the book Twenty Years of 50 People authored by members of the Chinese Economists 50 Forum.

The World Economic Forum's 12th Annual Meeting of the New Champions, also known as Summer Davos, now underway in China's eastern city of Tianjin, runs from Sept. 18 to 20. The northeastern port city of Dalian and Tianjin take turns as host city each year.

Editor: Ben Armour