China is capable of dealing with various financial risks and challenges, with more steps in the offing to step up financial oversight, officials and experts said.

"China is fully confident and capable of properly responding to various financial risks and challenges by increasing vitality through reform and solving problems through development," Li Yunze, head of the National Financial Regulatory Administration, said in an interview with Xinhua News Agency that was published on Sunday.

Li added that financial supervision should be more forward-looking, precise, effective and better coordinated, and that the country will make more efforts to build a financial regulatory mechanism to eliminate any gaps or blind spots.

The focus will be on strengthening institutional regulation and supervision of behaviors and functions. The supervision will be penetrating and continuous, he added.

According to Li, more efforts will be made to accelerate reform and defuse risks of small and medium-sized financial institutions.

"The administration will give full play to its professional advantages, strengthen guidance and coordination, and develop targeted risk treatment plans for each province, bank and company, avoiding a 'one size fits all' approach," Li said in the interview.

As of the end of the third quarter, the nonperforming loan ratio of commercial banks came in at 1.61 percent, while their provision coverage ratio stood at 207.89 percent, official data showed.

Despite the challenges and risks ahead, Li said he believed China's institutional advantages and its strong long-term fundamentals will support the country in preventing and resolving financial risks.

Luo Zhiheng, chief economist at Yuekai Securities, highlighted the necessity of strengthening institutional regulation, behavioral supervision, functional regulation, penetrating supervision and continuous regulation.

This will help improve supervision over different financial institutions, strengthen coordination between policies, better recognize financial risks and strengthen protection for the legitimate rights and interests of financial consumers, Luo said.

Citing messages delivered during the Central Financial Work Conference held in late October, Luo said the focus will be on strengthening financial supervision, preventing risks and promoting development.

More efforts will be made to deal with the risks associated with local government debt, the property sector and small and medium-sized financial institutions.

It is necessary to comprehensively strengthen financial supervision, as well as effectively forestall and defuse financial risks, according to the meeting, which noted that all types of financial activities should be placed under regulation as per law.

According to the meeting, efforts should be made to establish a long-term mechanism to guard against and defuse local debt risks, and the country will satisfy the reasonable financing demands of various real estate enterprises.

Li Chao, chief economist at Zheshang Securities, said he expects to see further moves next year to resolve local debt problems and greater measures aimed at stabilizing the housing market.

Liu Zizheng contributed to this story.

ouyangshijia@chinadaily.com.cn