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China should seek new ways to absorb funds for the further development of its western region, rather than depending wholly on policy bank loans and financial support from the central government.

Zhou Xiaochuan, governor of the People's Bank of China, or the central bank, made the remarks at a forum on Economic Development and Financial Services in the Three Gorges Area held here Tuesday in the southwestern municipality of Chongqing.

Zhou said the western region should strive to attract financial support from various sources by restructuring its financial institutions to provide better support and to make themselves popular investment destinations.

He acknowledged that policy funds were crucial to the rapid growth of China's western region, but new challenges arise now. A number of individuals, businesses and organizations there have failed to pay back their debts and as a result, many financial institutions retreat from the remote areas, where financial support is badly needed.

As a relatively poor region, China's western region needs funds the most, whether to further restructuring the economy, modernizing agriculture, or developing small and medium-sized companies, said Zhou.

The forum, attended mainly by bankers and local officials, focuses on how to provide better financial support for the development of China's western region.