grass - root organization closely connected to women and households. so far, the scheme has been running quite successful as evidenced by the wide access of the poor households to the credit support ( 98 percent of the credit funds was used to help the poor families ), the high success ratio of projects ( over 90 percent of micro credit recipients benefited from the support ) and high ratio of loan recovery ( nearly 95 percent of the loans were recovered except for situations when natural disasters or catastrophic accidents fall ). micro credit directly provides funds for the poor and employed women to start up production activities, thus creating a favorable condition for them to shake off poverty through reemployment and engagement in new business. micro credit scheme has also transformed the perceptions of the poor and employed women about jobs and contributed to their improved understanding of self - development based on dignified living. micro credit has generated technical services and training opportunities for the poor women to increase their production knowledge and skills, strengthen their perceptions about commodity economy and market competition, resulting in their broadened horizon and improved adaptability to the changing environment. apart from the above - mentioned economic gains, micro credit has also benefited women on the political front. it has improved reliance of women in the rural areas on local political organizations which have helped awaken their sense of involvement in the course of economic construction and self - rule by the villagers. so far, 4860 women ’ s economic cooperatives have been established in the poor areas in shanxi province with the support of micro credit scheme, and a large number of capable women have been elected into the “ two committees ” in the rural areas ( the villagers ’ committee and the local party committee ), promoting development of political civilization in rural china. in today ’ s situation when massive men and women aged young are floating out from the rural areas to the cities, it is of profound significance to strengthen micro credit support for those women remaining in the fields. in mainland china, apart from the micro credit support under the initiatives of the women ’ s federation, the government has also applied relevant international experiences to help reduce poverty. for example, in 1993, the chinese academy of social sciences started to introduce micro credit schemes on a pilot basis in certain poor areas in china by referring to the experiences of bangladesh in poverty reduction. so far, micro credit business has already conquered the following three stages of development in mainland china. first, business launching on pilot basis ( from early 1994 to october 1996 ). at this stage, micro credit business was mainly

high financial leverage of enterprises, an increase in interest spread can quickly translate into high financial costs for enterprises and big impact on the economy as well. another situation that may arise is that banks may be reluctant to give loans when facing risks and uncertainties in creditor protection. the resulting macroeconomic impact is evidenced by the japanese experience. reluctant to lend is a common phenomenon around the world. for instance, last year the loan to deposit ratio in hong kong was less than 50 percent. the ratio in china was about 70 percent. if financial bills issued by development banks were counted the ratio could be as high as 80 percent. if the banks cannot extend loans with confidence due to uncertainties in the financial environment and have to lower loan to deposit ratio as a result of new risk management requirement and banking supervision, the impact on growth, employment, and the goal of achieving a wealthy society should not be underestimated. while if neither increasing spreads nor withholding lending is feasible, the result may be that npls grow and accumulate and new actions are required. when it comes to absorbing npls, i would like to cite an analogy. when you think the tail of your cat needs a trim, you ’ d better cut it once and for all. if you cut it one time after another, each time both you and your cat have to endure pain and struggling. unfortunately this is a high probability event. hungary, a country that started reform much earlier and experienced radical transition, has had to cut the “ tail ” three times so far in reforming its banks. very few countries can claim success after just one operation. even the very few that had succeeded had to endure the painful cost of high inflation. in sum, the impact of financial environment on macroeconomy is an issue that deserves special attention. vi. emerging international consensus and standards the legal issues concerning financial ecology have always been at the center of attention in the evolution of the views of international organizations and the emergence of international standards. at the g20 ministers meeting held on november 20 - 21, 2004 in berlin, germany, the g20 issued a paper entitled financial institutional building, which summarized the consensus among the g20 members on the priorities of institution building in the financial sector. out of all of the elements, the g20 first stressed the importance of improving the legal framework, and pointed out that implementing and enforcing credit rights ( such as collaterals ) protection can contribute to improving financial services and deepening financial markets. in order to strengthen the