china ’ s financial market, including central banks, asset management companies and pension funds. one of the tasks for financial market is to open up in an orderly manner to enable convenient and effective asset allocation by both foreign and domestic investors. this is the first important function of the financial markets. the second major function is risk management, i. e. through price discovery and risk management tools. the day - to - day tradings on the financial market necessitate continued price discovery and accurate pricing. if we take government securities yield curve as the risk - free interest rates, financial market will price all kinds of risk premiums of financial products in transactions and send clear signals. moreover, financial market also provide all kinds of hedging tools and adequate liquidity to facilitate the selling and buying activities of market participants, and enable effective hedging of risks. once the foreign investors are investing in the onshore market, they will find a lack of derivatives, hedging tools and other financial products. this year our priority is to create a supportive environment to provide hedging tools for investors to effectively hedge and manage risks. the third function is to provide financial services to households and enterprises. financial services are mostly about resource allocation and risk management. here i wish to emphasize that professional financial services lower transaction cost and save time. efficiency of financial services can be measured by the time saved. for example, 20 years ago, one had to spend half a day to go to several places to pay the water, electricity and housing bills. ten years ago, a onehour visit to the bank would do the job. today, the bills can be paid in five minutes through online banking service or mobile payment applications. this shows that financial services are much more efficient today. it save consumers time just like eating out is more efficient than cooking at home, and buying apparel in a store is more efficient than making it yourself. therefore, the financial sector is in essence a competitive service industry. we will advance supply - side structural reform and open up to foreign investors so that the financial system can perform the three functions properly. on one hand, it increases the supply of financial factors by bringing in financial institutions, services and products. it allows us to make better use of both overseas and domestic markets and resources, improve resources allocation, and meet the needs for diversified financial services. on the other hand, opening up of the financial sector will help improve domestic institutional arrangements. in this process, china has 2 / 5 bis

##utely resolved risks of some high - risk financial holding groups, intensively rectified the financial order and conducted the special program on addressing internet financial risks. financial institutional reform continuously deepened remarkable achievements have been made in the reform of large state - owned commercial banks. in 1979, in order to support “ loans for government grants ” reform, the central government established various state - owned specialized banks, gradually discarded the division of work among these banks, split off their policy - related businesses, and transformed them into market 2 / 11 bis central bankers'speeches competitors. however, due to deficiencies in financial standards and rules, imperfect corporate governance structure and inadequate capital, as well as the impact of the 1997 asian financial crisis, there was a massive build - up of non - performing loans in the banking sector. at that time, some scholars at home and abroad believed china ’ s large state - owned commercial banks were on the brink of “ technical bankruptcy ”. in response, the chinese government issued special treasury bonds and established four asset management companies that specialized in receiving and disposing non - performing loans of rmb 1. 4 trillion hived off from state - owned commercial banks. however, deeper reforms like the institutional reform of large state - owned commercial banks remained untouched. in february 2002, it was clarified at the second national financial work conference that large state - owned commercial banks should be transformed into joint - stock companies and those with appropriate conditions could get listed. in 2003, the central government decided that the pbc should take the lead in researches on the reform of large state - owned commercial banks. the pbc then proposed creatively to inject the state ’ s foreign exchange ( fx ) reserves into large commercial banks, and designed a four - step reform program which included writing off actual capital losses, splitting off and disposing of non - performing assets, injecting fx reserves and getting listed on domestic or foreign markets. in september 2003, upon the deliberation and approval of the cpc central committee, the state council approved the general plan for transforming large state - owned commercial banks into joint - stock banks, of which the drafting was led by the pbc. according to the plan, bank of communications ( bocom ), china construction bank ( ccb ), bank of china ( boc ), industrial and commercial bank of china ( icbc ) and agricultural bank of china ( abc ) successively underwent shareholding reforms, stripped off non - performing assets, significantly shored up