Further opening-up of China's financial sector while tightening risk control regulations will aid the financing of Belt and Road Initiative projects, according to a senior official of the country's banking and insurance regulator.

China's banking sector, seen as a major source of financing that supports the initiative, will continually strengthen cooperation with foreign financial institutions along Belt and Road routes to expand the country's opening up, Wang Zhaoxing, deputy head of the newly merged banking and insurance regulatory commission, said at the China Development Forum 2018 on Saturday.

He also warned that if financial risks were not effectively controlled, Belt and Road construction would suffer.

Commercial banks, insurance companies and other financial institutions, as the major financing bodies, should give priority to assessing potential risks before making decisions, considering the geographic, political and legal environment in the countries concerned, said Wang, adding that the process will also be "a very big challenge".

Currently, the country's financing regulators are "proactively and steadily promoting further opening up of the banking sector", and new measures will provide more development opportunities to foreign financial institutions doing business in China, Wang said.

By December, 55 foreign banks from 21 countries and regions along the Belt and Road had opened branches or subsidies in China, according to data from the banking and insurance regulator. By the end of last year, 10 Chinese banks had established 68 branches in 26 countries and regions related to the Belt and Road, according to Wang's commission.

Since President Xi Jinping proposed the initiative in 2013, Chinese banks have issued more than $2 trillion in loans to support nearly 2,600 Belt and Road projects, especially focusing on transportation infrastructure, energy resources, equipment manufacturing and exports, Wang said.

Innovation in financial products and services, especially for cross-border yuan-denominated financing services, could offer new opportunities to strengthen cooperation among Chinese and foreign banks and multilateral financial organizations.

A good example, highlighted in Wang's speech, is yuan-denominated bonds, which are issued in foreign markets along the Belt and Road Initiative and can provide long-term and direct financing to the projects.