us federal government provides credit guarantee to private financial institutions that give credit to backward regions. in building the railway network in western states, the federal government granted various favorable financial policies to railway companies to boost their financing capabilities. 3. the focus in developing the finance for the disadvantaged in china we have made some progress in developing the financial system for the disadvantaged, but there is a lot to do compared with that in developed countries and in order to build a harmonious socialist society. in my opinion, we should make efforts in the following three key aspects to in order to develop a financial system for the disadvantaged. first, new measures should be taken to create a financial system for the disadvantaged. since reform, some financial institutions have been established for the disadvantaged in china, but there are not fully fledged. for example, there are structural and operational problems in the rural financial institutions, such as extensive operational mode, weak management, low profitability, yet - to - be improved staff quality, and high risks associated with rural credit cooperatives ; the agricultural bank of china has not fully functioned as a major player in commercial finance for farmers and rural economy ; the risk compensation, sharing and transferring mechanism is not sound for policy agricultural loans, guarantee mechanism in rural areas and agricultural insurance are yet to be developed. there are not enough innovations of financial institutions and supportive policies to meet the needs of farmers ’ productive activities and livelihood. generally speaking, there is room for improvement in the financial system for the disadvantaged, which should not only include traditional financial institutions, such as policy, development, commercial and cooperative financial institutions, but also include innovative financial institutions such as venture capital investment, guarantee, insurance, leasing, micro - credit financial institutions. endeavors should be made to create a system in which various types of financial institutions coexist, complement and compete with each other, each with well - defined functions and responsibilities to satisfy the demand of disadvantaged industrial sectors, groups and backward regions for financial services. it is worth mentioning that, micro finance, as a new measure of poverty reduction, has evolved from the micro loans for farmers in the 1970s, to micro - credit for microbusinesses in the 1980s, and finance that seeks commercial viability and loan coverage. it has become an important part in the financial system for the disadvantaged. we have made some trials in micro finance in the past, and in the future, we will explore a development mode with multiple players in line with the chinese situation by drawing on positive and negative experiences in other

both positive and negative. but in general, the theories, practice and experiences are driven by isolated events instead of a systematic plan. there is no theoretical conclusion made from the strategic perspective of constructing a harmonious socialist society, and no practice under the guidance thereof. because of the absence of a systematic financial theory, institutional and policy system to guide and push ahead the construction of a harmonious society, it is difficult to display the synergy of the entire financial sector in this cause. in the new century, especially since the 16th cpc national congress, we have clarified the strategic importance of building a socialist harmonious society for the socialist society construction drive. in addition, the just concluded 6th plenary session of the 16th cpc national congress adopted the decisions on major issues concerning the construction of a harmonious socialist society. as the center of the modern economy, finance should and is able to play an important role in the construction of a socialist harmonious society. so far, the financial sector has not fully adapted to the endeavors to build a harmonious socialist society. we need to make major breakthroughs in financial reform in the future. one of the major tasks is to conduct theoretical analysis on how to utilize the financial sector to support the building of a harmonious socialist society, and find a way for the sector to do so.. since structural imbalance is a major strain, finance should make its due contribution to solving the structural imbalances. to be specific, the financial sector should move away from the concept of “ favoring the rich over the poor ”, and provide, based on the market principle, necessary support to industrial sectors, regions and groups that are short of funding and lag behind in economic and social development. this is not only a requirement for the financial sector to support the harmonious economic development, but also a responsibility. as such, i believe it necessary to put forward the concept of “ developing the financial system for the disadvantaged ” to fully display the functions of the financial sector in the construction of a harmonious socialist society. 2. definition of the concept “ finance for the disadvantaged ” refers to the financing activities for the underdeveloped areas and groups. so far in china, it is meant to be the support rendered to the disadvantaged sectors with agriculture as the primary one, less - developed regions mainly in central and western china, and disadvantaged groups of farmers and laid - off workers in urban areas. it is fair to say that finance for the disadvantaged represents a revision to traditional finance