Premier Li states China unlikely to change prudent monetary policy

China has not and will not change its prudent monetary policy and will not resort to "flood-like" stimulus, Premier Li Keqiang said on Wednesday. A cut in banks' reserve requirement ratio (RRR) in January reflected ample room for such reductions, Li was quoted in a statement on the government's website.

Li also said the government needs to deepen reform to resolve long-term problems in the economy. Financial institutions should offer more credit, especially medium and long term loans to small firms, he said.

Rising bill financing and short-term loans could create potential risks, he added. China slashed RRR by 100 basis points in January - its fifth cut in the past year - as it looks to reduce the risk of a sharper slowdown in the world's second-biggest economy.