To defuse financial risks, especially systemic ones, is a fundamental task, and this explains why China unveiled a series of reform plans at a recent National Financial Work Conference to safeguard its financial security and promote the financial sector's efficient and sound operation to lubricate its sustainable and healthy economic and social development.

Since the 18th National Congress of the Communist Party of China in late 2012, the top leadership has attached great importance to guarding against financial risks and taken a range of financial regulatory measures to bring financial risks under control in China.

However, the economic downturn pressures at home and abroad, and the accumulated structural and systemic contradictions emanating from China's new economic cycle, exacerbated by deepening economic globalization and spillover effects of the global financial crisis, call for a strengthened and more responsive financial regime to preempt financial risks.

Given that the sector is susceptible to any uncertainties, acute risk awareness is needed. Precautionary measures should be taken to prevent not only "black swan" but also "gray rhino" events, and any measure introduced should achieve tangible effects.

China should better control the "chief valve" of credit to defuse a financial risk at the source. At the same time, it should improve its emergency response mechanism and put in place a set of complete contingency measures to preempt and address liquidity risks, credit risks, the risk of shadow banking business, abnormal capital market fluctuations and real estate bubbles. It should also better supervise emerging online financial products and services, which have largely fallen outside the current supervisory system.

China's rich experiences in dealing with the Asian financial crisis and the global financial crisis, along with its full-fledged financial regulatory regime, are expected to help it effectively defuse potential financial risks and make the financial sector better serve the real economy.