This year, the PBOC has made several moves related to interest rate liberalization specifically in the China (Shanghai) Pilot Free Trade Zone in 2014. One step was to end the interest rate cap for small-scale foreign-currency accounts.

"Although interest rates in China have risen recently, generally speaking, domestic interest rates are below the market-clearing level.

"Thus, even if interest rates climb, credit demand and expansion may be stable," said Wang Tao, chief economist with UBS Securities in a recent report.

The rapid development of Internet financial services since June 2013 reflects the regulators' positive attitude toward such financial innovations, particularly because they have served to accelerate interest rate liberalization, to force banking sector reform and to offer households higher returns on their savings, said Jian Chang, analyst with Barclays Research in a note.

"Internet financial services have been a catalyst in pushing up funding costs and changing banks' asset and liability management," said Chang.

Li said deepening financial reforms have many aims such as promoting the establishment of privately backed small and medium-sized banks and other financial institutions, maintaining the yuan's exchange rate at "an appropriate and balanced level" and expanding its floating range, and moving toward yuan convertibility under the capital account.

China will also advance reform by establishing a system of shelf registration for equity issues and promoting the sound development of Internet finance, said Li.

Xinhua contributed to this story.

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