BEIJING -- Chinese Premier Li Keqiang said Friday that the country should push forward reforms in the financial sector to support growth of the real economy.

The financial industry plays an irreplaceable role in upgrading economic growth and improving people's lives, Li said in a conference with China's banking regulator and leaders from commercial banks.

"If we compare the real economy to flesh, finance is the blood within it. They rely on and supplement each other," Li said.

Commercial institutions should push forward reforms to solve financing problems for companies and high financing costs, Li said, adding that they should support small and medium-sized companies in particular, as well as entrepreneurship and innovation.

Banks should take multiple measures for lowering real interest rates, including extending loan periods when the borrower cannot repay in the contracted time, Li said.

The country should create more government-supported financing guarantee institutions, mutual funds, and re-guarantee institutions, while liquidating existing capital through securitization of credit assets and loan transfers, Li said.

Li added that direct financing should be promoted through a registration-based initial public offering system and the healthy development of a multi-layered capital market.

"The country should guide more capital into the real economy to let both finance and the real economy share the benefits of development," Li said.

China must deepen reforms if it wants to reinforce the vitality and efficiency of the financial sector, with measures including opening up market access, market-oriented interest and exchange rate reforms and making the yuan convertible under the capital account, the premier said.