wu xiaoling : expanding financing channels of the real estate industry and developing a win - win situation for the real estate and financial industries in china speech by ms wu xiaoling, deputy governor of the people ’ s bank of china, delivered at the annual conference of real estate finance in china, beijing, 5 november 2005. * * * ladies and gentlemen : good morning. it is my great pleasure to attend the “ annual conference of real estate finance in china, 2005 ”. i would like to take this platform to make a few comments on real estate finance. all industries and enterprises are in need of financing, with the real estate industry being only one of them. however, the financing issue of other industries is rarely talked about while financing for the real estate industry has become a hot topic for wide discussions. why is that? i think basically there are three reasons behind it. first, the real estate industry concerns people ’ s living conditions. to live and work in peace and contentment are the two important preconditions for a harmonious society. the possession of a house ensures the basic life of the people ; whether living in a good and comfortable environment concerns the living quality of people. therefore, the housing policy and the development policy of the real estate industry concerns the achievement of the social development objective, which shall be one of the critical connotations for a well - off society. second, the real estate industry enjoys a relatively long industrial chain and promotes the economic development greatly. the economy in china is in a phase of transformation and transition. the commercialization of housing and the urbanization of rural areas are exactly the processes in which the development of the real estate industry and that of other industries are mutually re - enforced. consequently, the real estate industry shall be one of the pillar industries in national economic development for quite a long period in the future. third, the development of the real estate industry concerns national interest and people ’ s livelihood. however, the productive cycle of real estate is so long that there is a process from the emergence of intensive demand for funds until the final payments made by the consumers. such a mismatch can also be regarded as the timing difference between the demand for and supply of funds, which is a financial issue for sure. it is the special social and economic role played by the real estate industry and the urgency regarding the financing of the real estate industry that have aroused people ’ s particular interest in the real estate finance. real estate finance definitely does not refer

of financing products shall mainly target qualified investors. given the fact that we have neither rules regulating private funds nor classifying standards on qualified investors, people who are lacking in risk identification ability and risk bearing capacity are hence usually involved in collective trust plans, leading to relatively high market risks. as both the value of underlying assets and the number of units of privately - offered real estate funds are not high, problems of limited scope and low liquidity also exist for privately - offered stocks, consequently, the above two financing modes both face quite a few restrictions. to establish real estate investment trust fund via public offering or issuing beneficiary certificates based on specialized management shall be the future development direction as well as a sustainable developing mode for direct financing of the real estate industry, and it shall also be an important financing mode to support investment in house leasing market. i hope the current reform on non - tradable state shares and the implementation of the newly revised securities law shall expedite this process so as to develop a winwin situation for both the real estate industry and the financial industry.