An expressway linking Yunnan's Maliuwan area to Zhaotong City opens to traffic on December 26, 2015, marking the completion of the 1,032-km north-south expressway in the province. It is of great significance in boosting economic development in southwest China (XINHUA)

During the 13th Five-Year Plan (2016-20) period, China must improve the efficiency of the financial sector in serving the real economy. Following this principle, five major tasks should be undertaken, which include improving the financial environment to achieve higher efficiency in resource allocation, supporting innovation and business startups, facilitating the role of investment in stimulating growth, and developing a system of diversified financial institutions.

In order to improve the financial environment to attain higher efficiency in resource allocation, market-oriented reforms in interest rates, exchange rates and treasury bond yield curves need to be completed.

Interest rates represent the price of capital, and thereby offer a standard for the allocation of real resources. A non-market-oriented interest rate system may lead to a distortion in resource allocation. The government must therefore accelerate its market-oriented reform of the interest rate system, with the goal of allowing the market's supply and demand to decide the formation of the interest rate. The reform should also focus on the interest rate transmission mechanism, as well as improving the central bank's market-based regulation capacity.

The role of exchange rates is to effectively allocate monetary resources throughout the world. To improve its efficiency in resource allocation in both domestic and global markets and to achieve a balance of international payments, China must improve the market-oriented exchange rate formation mechanism of the yuan.

As for the treasury bond yield curve, this concerns whether or not the pricing of various financial products is effective. If basic prices are not adequately formulated, the pricing of all a country's financial products will be negatively affected.

Supporting innovation and business startups is also one of the focal points for China's financial industry during the 13th Five-Year Plan period. Since there are huge uncertainties and risks regarding innovation, the financial industry should accommodate "trial and error" policies, make choices with the real economy in mind and assume responsibility when taking unavoidable risks that are inherent to innovation, so as to support industrial development. In this regard, the financial market, which provides direct financing, is more effective than financial intermediaries, which provide indirect financing.