to develop a new system and new mechanism required by the modern financial institutions. so far, the bank of communications has successfully completed ipo, china construction bank also was successfully listed in hk stock exchange on october 27. the industrial and commercial bank of china has completed their share holding restructuring. the credit business of commercial banks will be more rationalized on one hand with the gradually improved corporate governance structure and the strengthened external supervision, on the other hand, commercial banks have to adopt cautious stance for their business expansion due to the rigid requirement on capital adequacy ratio. against this background, enterprises are encouraged to explore new financing channels instead of overly depending on bank loans for financing needs. meanwhile, financial innovations are advocated to mitigate potential risks in the economic and financial operations. secondly, financial market was further improved, facilitating the market access of enterprises, and making it possible to rationalize the financing structure. we speeded up the development of financial market especially the inter - bank bond market in order to address the waning direct financing proportion and to diversify financing channels for enterprises while further steps were taken to implement the commercial bank share holding restructuring. highlighting market principles, institutional investors were cultivated in the course of inter - bank bond market development while priority attention was paid to preventing new risks. with major measures in place, qualified enterprises were allowed to issue short - term financial bills in the inter - bank bond market ; foreign - funded commercial banks with rmb business license can join bond underwriters'syndicate to provide underwriting services in the inter - bank bond market ; international development agencies were approved to issue rmb bonds in the national inter - bank bond market ; pan - asia bond index fund and abf china bond index fund have been launched in the inter - bank bond market ; bond forward transaction has been introduced ; efforts have been made to improve information disclosure system, and strengthen market disciplinary mechanism. etc. the adoption of these measures signified an important step forward to enhance the influence of financial market as well as its role in resource allocation ; enterprises could enjoy the access to broader financing channels, and favorable conditions were created to prevent them from exposing to risks. at the same time, these measures lay a foundation for the rapid development of financial derivative products. thirdly, better exchange risk management of enterprises is required by the rmb exchange rate regime reform. on july 21 this year, the pbc announced to reform the exchange rate regime by moving into a managed floating exchange rate regime based on market demand and supply

with reference to a basket of currencies. this reform is a self - initiated action consistent with the reality of china ’ s market economy situation. in the short term, some less competitive enterprises are bound to face intensified pressures. in this case, the enterprises should lose no time to learn and master all possible instruments to hedge foreign exchange risks and to become more adaptable to the floatation and movement of exchange rate. however, in the long run the adjustment of the exchange rate will provide incentives for these enterprises to transform their operational mechanisms, strengthen their self - innovative capability, accelerate economic restructuring, shift growth patterns of foreign trade, and upgrade the overall efficiencies of national economy. it is also conducive to achieving a basic equilibrium of the trade balance in goods and services, strengthening the independence of monetary policy, and enhancing the preemptiveness and effectiveness of financial macro control policies. fourthly, 9 reform measures on foreign exchange capital management were launched on a trial basis in pudong district shanghai with the purpose to create a favorable policy environment for multinational enterprises. previously, taking the facilitation of trade and investment, and the improvement of exchange market construction into consideration as the basic principle, reform on foreign exchange management was spearheaded in an innovative, gradual and controllable way as required in pudong district of shanghai by introducing the 9 policy measures, steps will be taken to conduct centralized management of foreign exchange capital in the domestic market, centralize the management of rmb capital, deal with cross - border capital operation, streamline the procedures of trade revenue and expenditure in foreign exchange, streamline the procedures under non - trade item, pursue financial innovation, and establish a monitoring and assessment system. the introduction of these policies is bound to facilitate the centralized foreign exchange management of multi - national enterprises, enhance their regional headquarters ’ capability of foreign exchange management, it also marks great significance to expand cross - border capital utilization of enterprises, support domestic enterprises ’ overseas investment, encourage banks to conduct derivative products innovation, and to create a favorable policy environment concerning foreign exchange management. fifthly, financial eco - system was improved, laying a solid foundation for the sustained development of various enterprises. the concept of financial ecology construction initiated by the people ’ s bank of china has received nation - wide attention recently. financial ecologic situation will not only affect the transmission of monetary policy, efficiency of resource allocation, financial stability and development, but also directly take effects on the operation and transaction costs of enterprises as