and the industrial and commercial bank of china were successfully listed in hong kong, raising a total share capital of us $ 36 billion. during this period, the stock markets in the mainland witnessed a relatively difficult time. the listing of domestic enterprises was subject to more restrictions. and at this critical moment, hong kong fulfilled this historical mission for our nation by playing an irreplaceable role in and making significant contribution to the reform of the banking system in china. we can imagine that, should the listing of the bank of china, the china construction bank and the industrial and commercial bank of china be delayed, no one knows to what extent would the progress of the reform of china ’ s banking system be affected with the outbreak of the global economic crisis in 2008. in july this year, the agricultural bank of china was also successfully listed in shanghai and hong kong simultaneously. although the market sentiment had turned cautious, the agricultural bank successfully raised us $ 12 billion in hong kong. the total proceeds raised from the offering of its a and h shares exceeded those of the industrial and commercial bank of china, making it the world ’ s largest ipo. in the past 20 years, the hong kong stock market has raised over us $ 300 billion for enterprises on the mainland. the reform and modernisation of the financial system in china is an important cornerstone for the continuous, rapid and stable economic development of our nation. the reform of the financial system involves the gradual relaxation of restrictions on capital accounts, the gradual move towards free convertibility of rmb and the adoption of the same practices by the mainland and international capital markets. however, moving too fast or moving in the wrong direction in the course of reform may bring high risk and great damage to china. therefore, china has to implement the reform gradually and take one step at a time. in the future reform of the financial system of china, hong kong will shoulder important missions in a number of aspects. first, hong kong banks that establish branches in the mainland and invest in the financial institutions in the mainland will not only bring in capital but also transfer the advanced management skills and experience of hong kong, which are conducive to enhancing the awareness and standard of governance and risk management of banks in china. in addition, hong kong will contribute to the improvement of the regulatory standard of mainland financial institutions through regulatory co - operation, technological exchanges and staff visits between the regulatory bodies in hong kong and on the mainland. secondly, with the expansion and diversification of international trade

. in 2009, hong kong invested us $ 46 billion in china, accounting for one half of the total foreign investment in the country. in the course of investing in china, not only has hong kong injected capital but, more importantly, it has introduced skills in production and management. in the past decade, the mainland projects in which hong kong invested have gone through some significant changes. the focus has been shifted from investment in the manufacturing industry to a range of diversified and multi - dimensional investments that include investment in all kinds of service industries. with regard to trades, hong kong continues to serve as the major channel for the rest of the world to access mainland china. notwithstanding the decrease in the proportion of china ’ s exports of goods going through hong kong, our role as the intermediate hub for trading has never been diminished. nowadays, the offshore trade conducted through hong kong and the re - export trade of hong kong still accounts for 30 % of china ’ s total trade volume. and what kind of role has hong kong been playing in the reform and modernisation of the banking system in china? can you recall the difficult times in the 1990s? in 1994, china implemented the significant reform of the exchange rate system and introduced the unification of the official and swap exchange rates. at the same time, transformation of stateowned banks into commercial banks started. due to various reasons related to the history and the system of mainland banks, the bad debt ratio of the banking system was very high. the international monetary fund once estimated that the total bad debt in china ’ s banking system reached rmb2. 3 trillion, accounting for 23 % of the total loans of the banking system and 19 % of the gdp. at that time, many people were not optimistic about the prospect of china because they thought the reform of the banking system would unlikely be able to succeed. if the reform failed, not only would economic growth slow down, the entire system of reform and opening up may also collapse. nonetheless, china managed to stand firm and implemented the system reform step by step. the critical stages of the reform included the transformation of the top four state - owned banks into joint - stock commercial banks and the subsequent listing of these banks to raise and replenish capital and to elevate the reform of governance, accountability, risk management, staff employment and transparency of the banks to a new height. it was not at all easy to overcome such a hurdle. in 2005 and 2006, the bank of china, the china construction bank