called “ chemical changes ” have already occurred in the bank of china and the china construction bank. first, they have already established and gradually improved the basic framework of corporate governance. second, they have made great efforts to strengthen internal control and risk management. third, the personnel management system and incentive mechanisms of these two banks have improved. fourth, their credit culture is improving. and lastly, they have placed greater emphasis on protecting the shareholders ’ interests. in general, these two banks have made substantial progress in improving their corporate governance, but certain problems remain. financial restructuring can be completed within a relatively short period of time, while the improvement in corporate governance will have to take longer time. as for the non - performing loans, it is quite normal for the commercial banks to have some non - performing assets since they are engaged in many risky businesses. as long as the amount of incremental non - performing loans of a given year is managed within a normal range and can be covered by the bad loan provisioning of that year, there ’ s not much to worry. otherwise the non - performing assets may erode the banks ’ capital, putting the banks in an unhealthy situation. with regard to the cases that happened in some banks, serious lessons will be drawn so as to improve the future work. i believe that these cases will not have a substantial impact on the overall reform process of the state - owned commercial banks. the reform has been carried out in a pragmatic and step - by - step manner. on the one hand, reform will be strengthened with the lessons drawn from these cases. on the other hand, the cases themselves indicate that the old systems and mechanisms are still playing a negative role, calling for greater reform efforts. reporter : in addressing a question from the media at the npc and cppcc press conference, you said that it won ’ t take too long for the bank of china and the china construction bank to get listed. could you further explain what “ not too long ” means. is there a timetable for the reform the industrial and commercial bank of china and the agricultural bank of china? zhou : as to when and where the bank of china and china construction bank will get listed, this depends on the decision of the boards of directors of these two banks. it also depends on whether there is a suitable window for listing operation in the capital market as well as on the opinions of their financial advisors, major underwriters and accounting firms. by saying “

not too long ”, i mean that these two banks have basically met the requirement according to the major criteria for public listing in the capital market. efforts will also be made to push ahead with the reform of the industrial and commercial bank of china and the agricultural bank of china. the office of the leading group for the pilot joint - stock reform of the state - owned commercial banks has already submitted to the state council the overall plan for the financial restructuring of the industrial and commercial bank. the reform will be carried out in accordance with the arrangement of the state council when conditions mature. the agricultural bank of china is encouraged to strengthen its internal control and risk management to improve its profitability and asset quality so as to pave the way for the joint - stock reform. reporter : the market - based interest rate reform is an important element of last year ’ s financial reform. the central bank has recently published a special report on the market - based interest rate reform. what is your conception on the market - based interest rate reform in the future? zhou : it was clearly pointed out at the third plenum of the 16th cpc national congress that steps would be taken to steadily advance the market - based interest rate reform and improve the interest rate formation mechanism based on market supply and demand, and the central bank would guide the movement of market interest rates by applying various monetary policy instruments. in recent years, the central bank has been making steady efforts to advance the market - based interest rate reform. two important measures were adopted in 2004. first, the band of interest rate on loans of the financial institutions was widened on january 1, 2004. second, the upper limit on loan rate and lower limit on deposit rate were removed on october 29, 2004. at present, there are only two control measures for interest rate, one is the ceiling imposed on rmb deposit rate and the other is the floor set for rmb lending rate. with the above two steps taken, the near - term goal for the reform of the interest rate system can be considered as basically realized and there will be no further reform measures in this regard in the near future. of course, the commercial banks still need to make sustained efforts to enhance their ability to properly assess risk and set prices. the upper limit on loan interest rate and lower limit on deposit rate will be maintained for a relatively long period of time before consideration can be given to remove them. this is because such reform involves the consideration of many factors including the order of market competition and the