Wen Jiabao: The goal in reforming the state-owned commercial banks is to establish a moderncommercial banking system in this country. We also believe that we need to explore thevarious and multiple formats of realizing public ownership. The shareholding system is aneffective format. However, the introduction of the shareholding system is not the objectiveitself, the objective is to improve the corporate governmental structure and to learn and drawupon the advanced managerial experience and expertise from others so that we can furtherimprove the management and efficiency of state-owned commercial banks. In reforming thestate-owned commercial banks we need to follow the following two principles: First, the statemust take a dominant controlling share in the state-owned commercial banks in order to keepthe economic lifeline of the country in the state's hands and fend off financial risks. Second,we need to strengthen and improve the whole process management in this reform. We needto step up internal control, regulation and supervision so as to prevent the stripping ofstate-owned assets.
《华尔街日报》记者：我有两个问题。一个问题是现在国际投资者都非常关注中国的股市，您是否认为在过去的两年，中国的股市上涨或者发展过快、过猛？您是否认为普通的投资者现在承担着过大的风险？ 中国政府打算采取什么样的措施来给股市降温，或者说来调控股市？另外一个问题是有关中国的外汇储备投资的。 中国政府提出要建立一个新的投资机构，寻求外汇储备的多元化。我想问的是，中国新成立的这种机构，它将把投资投向哪些具体的资产？
Wen Jiabao: I follow closely the development of the stock market, and I particularly hope to see itshealthy growth. Since last year, we have strengthened the development of institutionalinfrastructure for the capital market. In particular, we have successfully introduced thereform of listing non-tradable shares of listed companies, thus resolving an outstanding issue.Our goal is to build a mature capital market. To meet this goal, first, we need to improve theperformance of listed companies. Second, we need to develop an open, fair and transparentmarket system. Third, we need to enhance oversight and regulation of the capital market andespecially improve the relevant legal framework. Finally, we should see to it that stock marketrelated information is released on a timely basis and make individual stock investors moreaware of investment risks.
As to the issue of how to use China's foreign exchange reserves you have mentioned, thisis indeed a big issue we are facing. From our own experience, we know how difficult it couldbe when we lacked foreign exchange. In the 1990s, China did not have enough foreignexchange, so we borrowed foreign exchange from the IMF. The IMF only lent us 800 millionUSD. Now our foreign exchange reserves have exceeded one trillion USD, and how to makegood use of them has become a new issue for us.
China practices diversification of its foreign exchange reserves to ensure their security.Yes, we do plan to set up a foreign exchange investment company, and it will not be underany government department. The company will manage the foreign exchange according tolaw on a paid-use basis. It will be under government oversight and regulation and shouldpreserve and increase the value of the assets.
As it has not been long since China began to make investment overseas, we have littleexperience in this area. I recently looked at the statistics, which show that at the end of year2006, China's overseas investment in the non-financial category was only 73.3 billion USdollars. It increased by 16 billion US dollars last year. Still, it is insignificant in comparisonwith that of developed countries.
I know by raising this question, you may wonder whether the overseas investment to bemade by this newly established company will affect US dollar denominated assets. China'sforeign exchange reserves mainly consist of US dollar denominated assets. This is the fact.China's holding of US dollar denominated assets is mutually beneficial in nature. The settingup of a Chinese foreign exchange investment company will not affect the US dollardenominated assets.