Governor--ChenYuan

As the new millennium dawns, China is clearly drawing its share of attention on the global stage. The international coverage of issues such as WTO accession, the strong foreign direct investment and GDP growth that outpace many other countries, and the extensive reform efforts in various industry sectors ensures that China's continued economic, social and environmental development will be an issue worth watching in the coming years.

During 1999, China maintained a Gross Domestic Product growth rate that ranked among the highest in the world. The development of the country's services industries, the rationalisation of the industrial sector, and the continued shift in the agricultural industries from crop production to areas such as environmental conservation management have provided a more balanced basis for China's growth in the next millennium. Government policies on revitalising state-owned enterprises and the support of exports have been key contributors to the current market situation. Increased consumption and the growth of the money supply are evident in many key market indicators and reflect a positive consumer sentiment on China's future, also an important component of economic development.

The level of attention that China currently attracts globally provides China Development Bank with a great many challenges. We have a commitment to assist the government, and the people of China, in carrying out these extensive plans of reform and commercialization, and helping to make China a key market player on the global level in the next decade. To accomplish this, we have spent considerable time on initiatives and programmes designed to improve the living environment enjoyed by millions of Chinese citizens, to contribute to national economic development, and to aid in the development of the regional, middle-market economies that will be crucial to the overall success of the economic development efforts.

Accession to WTO is an important and necessary step for the globalization of the Chinese economy. It will be a catalyst for change, but it will also bring unavoidable pressures to the Chinese economic system. Access to world markets for Chinese products will be accompanied by more intense local competition; introduction of new capital and technologies will bring increased foreign competition; and a growing local market economy, by definition, will be influenced more heavily by regional and global actions.

Under such conditions, and with the continued integration of financial markets, industry convergence and consolidation, and a broadening of service offerings by global financial institutions, we are forced to carefully evaluate our own structure and services.