Premier Li Keqiang called on Tuesday for the building of a developed private equity market in China by canceling administrative approval procedures for product issuance, and measures to encourage venture capital to support small- and medium-sized enterprises.

Li made the call at an executive meeting of the State Council, China's cabinet, which discussed the development of the capital market and measures to broaden financing channels.

The premier stressed the importance of further opening capital markets and promoting reforms in the registration system for the nation's initial public offerings. This, would improve listed companies' performance and strengthen sustainable returns for investors.

Other measures agreed upon at the meeting include diversifying bond products and strengthening supervision of the bond market; promoting the development of the futures markets, especially treasury bond futures; and promoting the healthy development of online financial services.

Analysts said these measures would help to reduce over-reliance on bank lending, which would help prevent systematic financial risks.

Zheng Xinli, executive vice-president of the China Center for International Economic Exchanges, a government think tank, said that introducing private funding into the restructuring process for State-owned enterprise reforms is important for sustainable economic development and the transformation of China's economic growth pattern.

"Private equity can participate in debt restructuring projects, such as infrastructure construction in second- and third-tier cities, high-speed railways, and the energy conservation and environmental protection industries," he said.

Zheng said a multilevel capital market would reduce existing monopoly profits in the financial sector and cut capital costs for businesses as a result of greater competition between different financial institutions.

The China Securities Regulatory Commission, the country's top regulator of the equity market, released five new rules on Friday about IPO issuance methods, fundraising and information disclosure, to prepare the relevant policies for the IPO reforms.

chenjia1@chinadaily.com.cn