State bank shake-up to help increase private ownership

"Whether the mixed-ownership reform will succeed depends mainly on the determination and courage of the government," Wen said.

"It's very important that the government fully respects the thoughts of the diversified shareholders on corporate governance and a bank's daily operations, although a private company may not become a lender's largest shareholder."

Today, the government still plays a decisive role in the appointment of senior executives at State-owned banks.

Zeng Gang, director of banking research at the Chinese Academy of Social Sciences' Institute of Finance and Banking, said banks should increase the participation of private shareholders in the recruitment of senior executives and allow them to have a bigger say.

It is also important for the banks to explore a long-term incentive mechanism to unite their interests with that of senior executives and employees.

"By improving the corporate governance structure, State-owned banks aim to ensure long-term and stable development, rather than over-development over a short period," he said.

"This year, China's economy faces increased downward pressure, which demands higher standards for the banks' management and long-term stability.

"The mixed-ownership reform will be adjusted and improved step by step during its implementation process."