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

the local investment environment. in one word, this perception has marked a sharp difference from the past. many people used to hold the view that banking credit was actually confined to local use and the credit risks of the national commercial banks could be transferred to the government. now i am pleased to see some positive changes. from the perspective of the commercial banks, they are able to move credit fund from the high - risk areas to areas with low risks. they can also float the lending rate to reflect the financial risk difference among various regions. form the point of the local governments, they now care about not only the local financial environment, but also the quality of the local customers of the financial institutions. that is to say, they stress much about the creation of a sound local credit system under which businesses in the region must fulfill their fiduciary and debt obligation. apart from that, public listing companies in the region are also encouraged to timely disclose reliable and quality information so as to lay a solid reputation for other companies in the region seeking public offering. in my view, these are important and positive progress which owes much to the efforts of both the local governments and the commercial banks. however, we must recognize that these efforts only mark the beginning of a long process, and the remaining regional risk difference means the internal risk rating will continue to be applied in the foreseeable future. as the final note, i would like to point out that, despite the above progress, much remains to be done to eliminate the regional financial risk difference in china. regional segregation and disparity once has been a major obstacle to china ’ s economic reform. but i believe the market forces will finally prevail. with the implementation of the basle capital accord ii and the irb, better microeconomic fundamentals will gradually emerge as the local governments strive to improve the regional financial ecological environment and the interactions between the financial institutions and the local governments further strengthen in a positive way. i wish the seminar a great success, thank you all.