New | ANZ chief Michael Smith says China needs time to change

International pressure on China for faster reforms is unfair and stems from the poor understanding of the country's challenges, according to Michael Smith.

The Australian and New Zealand Banking Group chief executive, in an exclusive interview with the commended Beijing for its focus on reforms and urged the West to allow China the wriggle room to time and calibrate its policies at its own pace.

"The reform agenda in China is still pretty focused," Smith said. "There is a question mark over whether some of it has been fast enough, particularly in the restructuring of state-owned enterprises. Possibly the interest rate liberalisations and convertibility could have happened earlier. But China has to manage many issues.

"I think the important thing to understand here is the country has to manage the economy for itself, and to ensure the social balance doesn't get out of step. International pressure for faster change or certain reforms is not appropriate. It is up to China to make those decisions in its own best interest.

"The sheer size of the task ahead for China is sometimes totally underestimated by Western governments, which have gone through that development stage many years ago. They don't appreciate the significance of some of the social implications that have to be dealt with."

Capping a 37-year-long career in commercial banking, Smith's role in raising the international profile of ANZ ranks among his crowning achievements. During his time at the helm, revenue contribution of the bank's international business rose from 7 per cent to 25 per cent of overall group income while its regional ranking by Greenwich Associates leapt from the mid-30s to fourth, placing it just behind Citi.

Smith, 59, who resigned as HSBC's head of Asian operations in 2007 after serving with the bank for 30 years to join the Australian lender, said banks had to catch up with technology.