society. ii. the operation of the online verification system the online verification system is an important joint measure of the pbc and the mps to implement the use of real names for bank accounts, which welcomed by commercial banks. with close cooperation with and wide support of banks, the pbc and the mps succeeded to introduce the system nationwide by 29 june 2007. the system consists of two core parts, namely systems of information transmitting and sharing, run respectively by the pbc and the mps. the system provide such services as single verification, batch verification, log inquiry, statistics and analysis, which are available for use 12 hours a day 7 days a week. at present, about 155, 300 banking outlets connect to the system, while the rural credit union in remote areas could not gain access to the system because of technical problems. online verification refers to a process in which a bank uses the online verification system to verify a customer ’ s identity, including name, id number, photograph, issuing authority and other information as noted in the citizen ’ s id card. the basic method is that banks submit the name and id number of the customer to the system for verification. if the information is true, banks will obtain the remaining identity information such as photograph and issuing - authority from the system. however, if the id number does exist, but is not consistent with the name or the id number does not exist, the system will correspondingly respond. according to relative provisions of laws and regulations, banks will determine whether to proceed with relative banking business on the basis of different verification results. in compliance with the provisions of laws and regulations, as well as executive regulations, banks shall verify customer ’ s identity when offering the following products or services : account opening or changing, including personal savings account, personal settlement account and corporate settlement account ; ( 2 ) payment and settlement business, including bill clearing, bankcard settlement, remittance and cash services ; ( 3 ) lending services, including personal loans and corporate loans ; and ( 4 ) others ( e. g., cash deposit or withdrawal with the amount exceeding rmb 50000 yuan or foreign exchange equivalent to 10000 u. s. dollar ). to ensure the system to function smoothly, to facilitate the masses and to safeguard the public ’ s legitimate rights and interests, we have formulated measures for handling online verification and trained bank staff at basic level so as to make a thoughtful arrangement in area of operational rules. first, banks should give different treatment to different verification results.

of the rmb exchange rate regime on july 21, 2005, which has won objective and positive responses from the international community. 7. the policy analysis and forecasts conducted before the reform has produced different views about the reform impact, therefore, we need some time to observe and collect data to assess and confirm the impact of the exchange rate reform on the domestic economy and employment etc. 8. six months after the reform, most of the chinese enterprises have adapted smoothly to the reform after undertaking painful restructuring, however a few sectors suffered severely from the exchange rate adjustment. on such a count, we may conclude that the market force could be allowed gradually to play a greater role in the floating exchange rate. 9. over the past eight months, great efforts have been made by china to cultivate and develop foreign exchange markets. trading products were enriched in the market, risk hedging instruments like forward and swap were developed, market makers and otc transactions were introduced in the interbank foreign exchange market. the chinese enterprises and financial institutions need some time to learn and adapt to the changes in foreign exchange market, so that they could be in a better position to keep in line with the flotation of exchange rate. 10. over the past eight months, china has decontrolled some unnecessary foreign exchange restrictions. actions taken in this respect included relaxation of controls imposed on foreign exchange retained and use of foreign exchange under capital account by the enterprises, facilitation of foreign exchange use by individuals under current account, and the exercise of applying comprehensive management of foreign exchange positions held by the banks. through these efforts, the foreign exchange market will more objectively reflect the relationship between supply and demand of foreign exchange. gradualist approach or shock therapy? 11. due to the accelerating development of globalization, cross - border outsourcing and adjustment of supply chains as mentioned before, it is likely that it will take several years before the global trade could reach a new equilibrium. china as a large developing economy with heavy employment pressures and a still fragile financial system, could only adopt a gradualist approach to adjust its economy in a controllable manner. 12. the imf has recently held a conference to discuss the global imbalances, and most of the participants believed that it was appropriate to pursue a gradual adjustment, and radical measures could result in unanticipated consequences. besides, some participants suggested that the us has been too slow in making an internal adjustment. 13. some advisors have prescribed the “