##lity is need. v. the importance of market - based interest rate reform first, market - based interest rate reform is crucial to the allocation of financial recourses. optimizing resource allocation is an important function of the market. in the absence of sound allocation of financial resources, even a minor policy error will entail great loss on the overall economic efficiency. second, a special problem facing china is the large employment pressure. in china, about 10 million new jobs need to be created every year to absorb the increase in labor force, which include college graduates, migrant workers from the rural area, and urban laid - off workers. i believe many foreigners will be surprised at the figure of 10 million, which shows the severity of china ’ s employment problem. recent years ’ statistics show that small and medium - sized enterprises have made the greatest contribution to the creation of new jobs. how to better serve these enterprises, in particular, how to use interest rate policy to support their development to enable them to obtain loans or financing from other sources, depends largely on the progress in market - based interest rate reform. finally, china is expected to open its banking sectors in all areas - including market access, the range of customers and rmb business - in 2006. due to excessive regulation on interest rate, china ’ domestic financial institutions do not have sufficient capability in the pricing of financial products, particularly loan products. they need to accumulate more experience in financial product pricing so as to maintain their competitiveness in the international market. above is an overview of china ’ s market - based interest rate reform. i welcome any comments. thank you.

half of the global end products for a very long time, without raising the export price, hence setting a solid foundation for pandemic containment and global economic recovery. if money printing by the most developed country has triggered global inflation, then the goods made by hundreds of millions of workers in china are the “ key anchor ” in taming it. why is our central bank able to keep its balance sheet unchanged although the chinese government has extended considerable fiscal and financial support? first of all, it is attributed to big - picture - oriented, well - coordinated, scientific and reasonable macroeconomic decisions by the cpc central committee and practical, well - targeted and effective planning and directions by the state council as well as its financial stability and development committee. secondly, it is attributed to the commitment of the financial sector to containing outflow of funds from the real economy to the virtual economy and lowering internal leverage ratios, which contributed to scaling - back of interbank wealth management, interbank investment, entrusted loans, and trust channeling activities and contraction of high - risk shadow banking. thirdly, it is also attributed to a unique advantage of our central bank ’ s balance sheet : reserve ratio maintained at a high level through sustained sound monetary policy and legacy burdens relieved thanks to interest rate liberalization. therefore, unlike developed countries where the central banks have purchased assets to expand their balance sheets, china has encouraged banks to extend more loans to the real economy by cutting the reserve requirement ratio and appropriately increasing targeted refinancing. at the same time, china also guided the channeling of private savings into direct and securities investments, thereby significantly enhancing its capacity to produce and supply products urgently needed by china and the rest of world. the transition to a green economy has also been boosted as a result. china has entered a new stage of development and we will fully implement the new development philosophy, actively advance supply - side structural reform, and constantly foster the pattern of mutually - reinforcing domestic and international circulations. as for the financial sector, we must promote greater opening - up, improve corporate governance, accelerate market - based mergers and acquisitions, regulate online platforms, and ensure fair competition. efforts are required to step up digital transformation of conventional financial services to enable more targeted financial services to the real economy and prevent and tackle financial risks with more precision. financial inclusion should be promoted with a view to strengthening financial services to micro and small businesses and vulnerable groups so as to effectively achieve common prosperity. green finance should be developed to secure