including foreign strategic investors ). all of these changes will restrict the behaviors of commercial banks to some extent. now commercial banks can afford not to spend too many resources in research on pricing. but with the progress of market - based interest rate reform, pricing will take a large share of commercial banks ’ resources, and will reflect their core technologies and core competitiveness, consuming a lot of energy and resources. in fact, shibor can play a benchmark. shibor must become a recognized and authoritative interest rate benchmark to replace the benchmark lending and deposit rates set by the central bank. this being achieved, the central bank could gradually retreat from its intervention. simply put, interest rate pricing in fact releases pressure. when clients complain about high interest rate, commercial banks can pass the buck to the central bank because the central bank sets the interest floor. when shibor matures, shibor will become the culprit. such a change though looks simple bears important legitimacy, authoritativeness, and persuasiveness, and can make shibor a recognized and completely authoritative benchmark. what is market - based interest rate? in my understanding, it means deregulation. but if the central bank deregulates deposit rate ceiling and lending rate floor when there is no other reliable benchmark to substitute them, the result could be worse. when is the right timing for deregulation? my answer is when a new benchmark matures. shibor is an important benchmark, on which i have high hopes in the process of making interest rate more marketbased. interest rate floor and ceiling is likely to exist for some period. can the market - based interest rate transformation process start with discount rate linking with shibor? in fact, discount facilities are loans. a breakthrough with discount rate will have far - reaching impact on the market - based interest rate transformation, and provide experiences for future interest rate reform. third, i ’ d like to move onto the relationship between shibor and product innovation. there are a lot of innovative products based on shibor. hopefully more will emerge. there are also products based on other benchmarks, such as floating rate products based on 1 - year required reserve rate. it is up to product providers as for on which benchmarks they ’ d like to base their products. but when designing products with a long maturity such as 10 years or 15 years, product issuers shall take into account the uncertainty of the market - based interest rate transformation in the future

and opening policy, the production and transaction activities of enterprises and the banking credit business are under the planned economy. the sole ownership by the state blurred the relationships of interest by different participants of transactions, which not only weakened china ’ s traditional credit culture, but also influenced the evolvement of china ’ s traditional credit culture to the modern credit culture. therefore, establishing china ’ s modern credit culture in line with the development of socialist market economy is of urgent necessity as the reform and opening policy is steadily promoted. the main difference between “ modern credit culture ” and “ china ’ s traditional credit culture ” lies in its unique social, institutional, professional and commercial features. credit is hence no longer solely based on the assessment of individuals of the borrower who they know personally but also on assessment of others that the borrower has no direct contact at all, is no longer solely based on ethics but also on legal and institutional rules, is no longer solely based on information obtained from face - toface contacts but also on the analysis and judgment of a specialized third - party, and no longer is limited to the use of borrower and lender, but also acquires the nature of public goods. these features of modern credit culture develop it into a huge industry and hence have a far - reaching impact on the social and economic life. the chinese government is fully aware of the importance of establishment of china ’ s modern credit culture. the third plenum of the 16th central committee of cpc has put forward clearly that “ efforts shall be made to establish and improve the social credit system, in a bid to form the social credit system supported by ethics, based on property rights and safeguarded by laws, which constitutes necessary conditions for constructing the modern market system ” and that “ efforts shall also be made to speed up construction of the corporate and personal credit service system in accordance with the direction of improving laws and rules, operating by franchise, commercial management and specialized services. ” corporate and personal credit is the foundation and core for social credit. premier wen jiabao has emphasized on several occasions that efforts shall be made to speed up the construction of unified national basic database for corporate and personal credit reporting, to step up credit reporting legislation, to promote development of credit reporting sector, to actively develop specialized credit reporting agencies, to open the credit reporting market step by step by setting priorities, to establish gradually the system of punishment against default on credit, to standardize operation of credit reporting agencies and to strengthen supervision and management of the credit