to 12 months. trading rules are also specified and updated in relevant regulations, and the deliver - versus - payment ( dvp ) approach is introduced in settling draft transactions to reduce risks. going forward, the pbc and financial institutions should strengthen communication and training, and focus on innovation and risk prevention. in particular, it is important that merits of electronic drafts are effectively communicated to their major user, i. e., the enterprises. financial institutions should leverage the new system to consolidate their businesses and create better products. it is also critical that we make efforts to address potential security risks facing the system. the development of the electronic commercial draft system received support from many financial institutions. a number of banks and finance companies, including the china merchants bank, china citic bank, china minsheng bank, and industrial and commercial bank of china contributed to the discussions, drafting of regulations, and system testing that eventually lead to the creation of the system. on behalf of the people ’ s bank of china, i would like to thank these banks, and other banks, finance companies, and the clearing center for rural credit banks for your contribution. thank you.

the grip of what the eminent harvard professor joseph schumpeter many years ago called “ creative destruction, ” the continuous process by which emerging technologies push out the old. standards of living rise when incomes created by the productive facilities employing older, increasingly obsolescent, technologies are marshaled to finance the newly produced capital assets that embody cutting - edge technologies. this is the process by which wealth is created, incremental step by incremental step. it presupposes a continuous churning of an economy as the new displaces the old. although this process of productive obsolescence has ancient roots, it appears to have taken on a quickened pace in recent years and changed its character. the remarkable, and partly fortuitous, coming together of the technologies that make up what we label it – information technologies – has begun to alter, fundamentally, the manner in which we do business and create economic value, often in ways that were not readily foreseeable even a decade ago. before the advent of what has become a veritable avalanche of information technology innovation, most twentieth - century business decisionmaking had been hampered by dated and incomplete information about customer preferences in markets and flows of materials through a company ’ s production systems. relevant information was hours, days, or even weeks old. accordingly, business managers had to double up on materials and people to protect against the inevitable misjudgments that were part and parcel of production planning. ample inventory levels were needed to ensure output schedules, and backup teams of people and machines were required to maintain quality control and respond to unanticipated developments. of course, large remnants of imprecision still persist, but the remarkable surge in the availability of real - time information in recent years has sharply reduced the degree of uncertainty confronting business management. this has enabled businesses to remove large swaths of now unnecessary inventory, and dispense with much programmed worker and capital redundancies. as a consequence, growth in output per work hour has accelerated, elevating the standards of living of the average american worker. intermediate production and distribution processes, so essential when information and quality control were poor, are being bypassed and eventually eliminated. the proliferation of internet web sites is promising to alter significantly the way large parts of our distribution system are managed. moreover, technological innovations have spread far beyond the factory floor and retail and wholesale distribution channels. biotech, for example, is revolutionizing medicine and agriculture, with far reaching consequences