SIMIC

Speaking at the Asian Financial Forum, Mr Guo said private firms contribute about 60 per cent to the economy but have only half the tax burden of state-owned enterprises.

"It's impossible for China's banks to subsidise state-backed companies amid intensified competition in the credit market," said the nation's top financial regulator.

But China has come under greater international pressure in recent years to reduce industrial subsidies after the US, Europe and Japan agreed to push for stronger World Trade Organisation rules against market-distorting government aid.

China recently reported economic growth that exceeded its pre-pandemic rates in the fourth quarter, enabling it to post a full-year expansion as major economies suffered contractions.

While growth in 2020 was the slowest in four decades, the outperformance meant that China increased its share of the world economy at the fastest pace on record, according to the World Bank.

In the past decade, China contributed nearly 30 per cent on average to the world's economic growth, Mr Guo said. The competitiveness of Chinese products didn't come at the cost of hurting its workers' interest, he said.