SHANGHAI - China's prudent monetary policy should be more flexible, and it should strengthen counter-cyclical adjustments in economic management, Vice-Premier Liu He said Thursday.

Liu made the remarks in a congratulatory letter to the opening of the 12th Lujiazui Forum. The letter was delivered at the forum by Yi Huiman, chairman of the China Securities Regulatory Commission (CSRC).

While China's economic growth still faced downward pressure, the economic trend has shown positive signs, Liu He said

In his letter, Liu said that China will keep aggregate policy appropriate and keep liquidity reasonably ample.

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Liu said a number of the country's economic indicators have shown marginal improvement after measures were taken to prevent and control the COVID-19 epidemic.

While China's economic growth still faced downward pressure, the economic trend has shown positive signs, Liu said.

Positive results can be seen as companies pick up production. The country's industrial output increased 4.4 percent year-on-year in May and the manufacturing sector grew by 5.2 percent year-on-year.

The country's total fixed asset investment rose by 5.87 percent from a month earlier. Consumption is also showing signs of improvement, represented by the recovery in sales of automobiles and residential housing, Liu said.

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Meanwhile, Yi said the country would continue to "comphrensively deepen" capital market reform, and that the top priority was to help market confidence recover amid the COVID-19 pandemic.

Major policies to support the capital market reform and innovation will first be tried in Shanghai so that the city can enhance its international financial hub status, Yi said.

The CSRC will support the opening-up of the stock market, bond market, futures and other derivatives market in the city. The Shanghai Stock Exchange will be encouraged to carry out more cooperation with overseas markets. The city should be more influential in terms of the pricing power in large commodities such as crude oil, Yi said.

Overseas financial institutions are welcome to establish foreign-controlled securities, fund, and futures branches, Yi said. Efforts should be made to attract more world-class investment banks and asset management firms. To that end, the regulators should continue to create an equal business environment, the CSRC chairman said.

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Meanwhile, attempts should be made to explore China's version of class action lawsuits and dispute reconciliation for securities and futures trading in Shanghai to improve the rule of law in the financial sector, he added.

Yi said that China would improve oversight over cross-border misbehaviour in stock markets and strengthen cooperation in the auditing of listed companies.

He said there was zero tolerance toward accounting fraud.