China continues to face economic challenges and needs to reform its financial system in order to shore up economic growth, according to central bank governor Zhou Xiaochuan.

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"There have been substantial reforms of the financial sector over the past 10 years but we cannot ignore the impact of the current external economic environment on China or the deepening of the international financial crisis," he said.

Zhou made the remarks in the latest issue of China Finance, a magazine published by the People's Bank of China, on Oct 1.

The PBOC aims to make its monetary policies more effective while maintaining stability and consistency, he added.