The IMF and the World Bank released an evaluation of China\'s financial sector, applauding the country\'s progress and calling for further reforms. This is the first time China accepted the assessment of financial vulnerability, as a commitment to the G20 Washington Summit in November 2008. There appear different opinions about whether the evaluation is a good remedy and suits China\'s case. Some say yes the evaluation is \"constructive,\" yet China has its own particular situation that might not be easily evaluated by others. Further more, they believe the country\'s financial system is strong enough to counter potential risks, and the concrete suggestions of reform proposed by IMF may not be so practical. IMF report \"China has made remarkable progress in its transition toward a more commercially-oriented and financially sound system,\" the Financial Sector Assessment Program (FSAP) review said. \"Improvements continue to be made to the structure, performance, transparency, and oversight of financial institutions and markets. As a result, the financial sector entered the global financial crisis from a position of relative strength,\" said the IMF.Besides this, the report pointed out its vulnerabilities as well. It warned that the country faces \"a steady build-up in vulnerabilities\" and listed interest and exchange rate reforms as high priorities. \"China\'s financial supervision and regulation are being strengthened, but risks stem from the growing complexity of the system and the uncertainties surrounding the global economy,\" it said. According to the report, China\'s financial sector is confronting several near-term risks, including deterioration in loan quality due to rapid credit expansion, growing disintermediation by shadow banks and off-balance sheet exposures, and the uncertainties of the global economic scenario. It also revealed that stress tests conducted jointly by the IMF and Chinese authorities showed that most of China\'s largest 17 commercial banks appear to be resilient to isolated shocks, which include a sharp deterioration in asset quality (including a correction in the real estate markets), shifts in the yield curve and changes in the exchange rate. But if several of these risks were to occur at the same time, however, the banking system could be severely impacted, the report warned. Suggestions VS. Reactions IMF suggested that China make further reforms to strengthen its financial sector, including taking steps to broaden financial markets and services, reorienting the government\'s role in the banking system, expanding the use of market-based monetary policy instruments, and upgrading the financial infrastructure and legal frameworks. China\'s central bank said in an announcement that the report is generally \"objective, positive and affirmative\" and that its suggestions are \"constructive.\" However, certain views in the report \"are not sufficiently comprehensive or objective,\" the People\'s Bank of China (PBOC) said in a statement posted on its website. The PBOC statement said specific timing and sequence of several proposed reforms should be based on further research of the country\'s actual conditions. China has made great progress in interest- and exchange-rate reforms, and market mechanisms have played a fundamental role in the formation of China\'s interest and exchange rates, the central bank said, adding that the country will remain flexible in promoting reforms based on the country\'s conditions. The country will strengthen cooperation and exchanges with international financial institutions to promote the steady development of its financial sector and prevent risks, according to the statement.