system and establishing a more vigorous and open economy. efforts have been mainly focused on the following areas to enhance corporate competitiveness : 1. the reform of soe has accelerated as reflected in the establishment of state - owned asset management and supervision system and improved corporate governance. ( 1 ) the state assets administration and supervision commission has been established. ( 2 ) rights and accountability of the board of directors, board of supervisors and shareholders have been defined in line with the requirements of modern corporate governance. ( 3 ) on that basis, we have taken active measures to develop large enterprise groups which are competitive and further revitalize the small and medium - sized soes. some soes have already established reputation in the world. such well performing enterprises as china mobile, sinopec, picc property & casualty co. ltd and casic have successfully launched their ipos overseas. by the end of 2003, the net assets of the top 10 overseas listed companies have exceeded rmb 1 trillion yuan and their net profits reached rmb 146 billion yuan last year. 2. agricultural restructuring has speeded up and government support strengthened. ( 1 ) land system has been reformed in the rural areas to protect the interests of the farmers. ( 2 ) reform of taxes and fees in the countryside has been deepened. at the beginning of 2004, the state council decided to eliminate agricultural tax within 5 years. by now, agricultural tax has been removed in 8 provinces, lowered by 3 percentage points in 11 major grain - producing provinces and by 1 percentage point in the rest of the country. this practice has reduced the tax burden on the farmers by 30 percent. ( 3 ) employment environment has been improved to accommodate increasing labor migration from the countryside. ( 4 ) financial support has been granted to pilot reform of the rural credit cooperatives aimed at improving rural financial service. 3. development of the non - public sector has been boosted. the chinese government encourages competitive enterprises to grow larger and stronger, and allows greater participation of foreign investment in order to improve efficiency through competition. ( 1 ) on january 1, 2003, the small and medium - sized enterprises promotion act was promulgated to provide legal protection for the development of the smes. ( 2 ) the constitution has recognized the non - public sector as an important part of the socialist market economy and calls for facilitation, support and guidance for its development. the constitution also explicitly provides for protection of private property. since the beginning of reform and opening up, the private sector has

both banks have finished financial restructuring and transformed into joint - stock companies. the banking system as a whole has improved asset quality, capital adequacy and capacity to withstand risks. further promoting market - based interest rate reform. the basic objective and principle of china ’ s interest rate reform are as follows : putting in place a market - based interest rate mechanism in which the central bank could use monetary policy instruments to adjust and guide the movement of the market interest rate so that the market forces can play a dominant role in the allocation of financial resources. interest rate reform should go hand in hand with the economic and financial developments and be consistent with the improvement of corporate governance and internal control in the commercial banks. in recent years, the market - based interest rate reform has advanced steadily. money market interest rate is now determined by the market. administration of both deposit and loan interest rates was streamlined and autonomy of the commercial banks in the management of interest rates improved. floating band of the lending rates has been widened to expand access of the smes to bank credit. the floating band of the lending rates was further widened on january 1, 2004, bringing the upper limit of the lending rate up to 170 percent of the benchmark rate. improving exchange rate regime. it was made clear at the 3rd plenary session of the 16th national congress of the chinese communist party in october 2003 that efforts should be made to “ improve the rmb exchange rate regime and keep the rmb exchange rate basically sable at an adaptive and equilibrium level. provided effective risk control mechanism is in place, restrictions on cross - boarder capital transactions will be relaxed in a selective and sequenced manner so as to gradually move toward capital account convertibility ”. over the recent years, we have made great efforts in improving the rmb exchange rate regime and such efforts have resulted in the acceleration of the state - owned commercial banks reform, current account convertibility, reduced control over capital account transactions, increased openness of the capital market for foreign institutions and foreign - invested enterprises, and greater access to an increasingly diversified financial market. we will further advance the reform and move toward an exchange rate regime with greater flexibility. the reform in this area is a complex task and should taken into account numerous factors, including macroeconomic performance, social development, balance of payments, the progress of reform in the banking sector, and the regional and global economic and financial situation. we will adopt a mix of measures to advance the reform of the exchange rate regime in a gradual and steady