Hu Xiaolian, deputy governor of the People's Bank of China, the central bank, alerted banking regulators on Thursday to hidden risks in China's financial sector even though the assets and profits of domestic banks have rapidly grown.

"If the banks provide a number of dazzling products that most people don't understand and that create demand only within the financial system, but the products become a major source of profit for banks, we should pay high attention to the hidden financial risks and their impact on the economy," Hu said at the 18th International Conference of Banking Supervisors in Tianjin.

She said the regulator should evaluate banks on a number of factors, including the development of banking businesses, risk control, level of profitability and social contributions.