. hong kong is one of the major international financial hubs in the world. it has an open and free business environment, sophisticated financial markets, well - functioning financial infrastructure, a vast talent pool, a sound legal system, and a regulatory system well aligned with international standards. it is the world's largest offshore rmb market. it is also asia's largest asset and wealth management center and 2nd largest center for hedge funds and private equity. the pboc is committed to supporting hong kong's role as an international financial center. we will continue to create an enabling environment for the rmb business in hong kong. we will continue to support hong kong's role as an international asset center and risk management center, and its goal to become a fin - tech and green finance hub in the asia - pacific region. we will continue to support hong kong's financial stability. we believe that, with all its strengths, a favorable policy environment and its talented and hard - working people, hong kong's standing as an international financial center will be further enhanced. finally, before i take up your questions, let me wish this conference a great success! 4 / 4 bis - central bankers'speeches

the centralized command economy, we were once proud of being a country with neither domestic nor foreign debt. with the deepening of china ’ s economic interactions with the outside world since the start of reform and economic opening up, mentality of the chinese people has witnessed tremendous changes. in 1979, china resumed external borrowing which was suspended for 20 years, and financed a total of us $ 3. 5 billion externally in the year. in 1981, the chinese government decided to issue treasury bonds totaling 4. 9 billion yuan. with steady progress of the financial industry, consumer credit has gradually become popular among the chinese people who find their livelihood is increasingly dependent on various services and facilities provided through the financial system. in 1985, the shenzhen branch of the china construction bank issued the first ever home mortgage loans to a customer in china. as of the end of 2005, china ’ s outstanding balance of government bonds reached 2. 7 trillion yuan, and that of foreign debt and house mortgage loans amounted to over us $ 260 billion and 1. 84 trillion yuan respectively. china ’ s financial assets totaled 37. 5 trillion yuan, 2. 06 times of the gdp. it is the financial reform and opening up that has enabled the chinese financial institutions to improve its business performance and management level amid market competition, especially in competition with the foreign institutions. at the same time, the foreign financial institutions has also benefited from the opening up of the chinese financial industry. the foreign financial institutions have brought competition incentives for their chinese counterparts to improve and transform business strategies and management by setting good examples in the conduct of intermediary business, patent application of certain banking products, charging fees on account services, disintegrating the customer market and introducing the concept of check and balance in building up the internal control system etc. as the most open and developed city in mainland china in terms of the financial industry, shanghai harbors the best branch offices of the chinese financial institutions with respect to profitability, asset quality and product innovation, with its financial openness not posting a competitive barrier for growth of the domestic institutions. with the development of the chinese economy, the deepening of financial reform, steady improvement of management skills in the chinese financial institutions and the strengthening of profitability, the chinese banks realized profits totaling 253. 2 billion yuan in 2005, compared with 23. 2 billion yuan in 2001. at the same time, asset quality also evidently improved, with the npl ratio dropped from 25. 4 percent in 2001 to 9. 8 percent in