The Chinese government is paying "high" attention to risks in the financial sector, Premier Li Keqiang said during a press conference at the close of the National People's Congress (NPC) on Thursday. Li said that while he doesn't want to see defaults of financial products, some cases may be unavoidable. "I'm afraid sometimes certain individual cases of such defaults are hardly avoidable. What we should do is step up monitoring, properly handle relevant matters and ensure that there will be no regional and systemic financial risks," he said. China's financial sector, particularly the shadow banking industry, has been in the spotlight in recent months after a near high-profile failure of a trust product, which was marketed by ICBC, in January.
(Read more: Get ready for more China shadow-banking defaults ) On elevated local government debt levels, Premier Li said risks in this area are under control, citing the recent debt audit conducted last year. "Our debt-to-GDP (gross domestic product) ratio is below the internationally recognized warning line," he said. "But the government will not overlook the potential risks, we are going to take further regulatory steps, put those debts under budgetary management, and also enhance the oversight of financing vehicles. In other words, we are going to keep the front gate open and lock side doors," he added.
(Read more: What that China debt default means to the market ) China's annual meeting of the NPC - the highest organ of state power that meets annually to approve policies, laws, the budget and significant personnel changes - came to a close on Thursday. Around 3,000 delegates attended the meeting in Beijing, which began on March 5.
Flexibility around growth target When asked by CNBC what the slowest rate of growth policymakers would tolerate this year was, Li did not provide a specific level.
Instead, he said, "We set the GDP growth target at about 7.5 percent; this 'about' shows that there is a level of flexibility here. This GDP needs to ensure fairly full employment and help increase people's income. We aren't preoccupied with the GDP growth." China's economy expanded 7.7 percent last year, firmly above the government's annual target of 7.5 percent. However, a recent softening in economic data has raised concerns over the economic outlook.
Despite the Premier's comments on flexibility around growth, Louis Kuijs, chief China economist at RBS believes it remains top priority for the government.
"Beijing takes growth very seriously as was underscored by the government work report submitted to NPC last week. It continues to be the dominant objective of economic policy," Kuijs told CNBC. "As a result, there's still potential for stimulus. I don't think they should do that, but I wouldn't be surprised if they did," he added.