They participated in "Senior Forum on China's Financial Reform and Development" and made comments on the aforesaid questions.

Shang Fulin: A Huge Space in the Capital Market

Although assuming his office as early as on Dec. 27, 2002, Shang Fulin kept a low key and never made any speech on public occasion before.

At first, Shang Fulin gave an active affirmation on the functions and effects of domestic securities market, saying that the basic assortments in the securities market such as stocks, funds, bonds and futures have by and large taken shape and the product innovation is now advancing step by step.

According to his opinion, now the development of China's securities market is faced with good opportunities and conditions. The capital market sees a huge space for development as supplied by the following two aspects of demand: building a well-off society in an all-round way needs the capital input; the huge increase of residents' bank savings and the establishment and perfection of social security system necessarily go along with the demand of investment.

Meanwhile, the centralized and unified securities markets will play a special role in breaking the separations of material markets and realizing the most optimum distribution of resources across trades, regions and industries. In addition, to deepen SOE reform needs the securities market making further use of its functions to foster and rationalize the market subjects such as listed companies, and the moderate currency policy is in need of focusing on the security prices and the liquidity of the securities market.

Shang Fulin claimed that China Security Commission would promote the institutional investment greatly, link up the connection channels between currency market and capital market, improve the stratum and product structures, meet the different requirements of the market participators and enhance the abilities of the securities market in resources distribution. Besides, it is necessary to iron out the historical problems and hidden risks properly to boost the steady development of the capital market.

Liu Mingkang: difficult for medium-and small-seized enterprises to finance

Liu Mingkang appeared in public as Chairman of China Bank Regulatory Commission for the first time, saying that medium-and-small-seized enterprises are playing a more and more important role in the national economy, but the problem of blocked financing channel has harassed the development of them.

Medium-and-small-seized enterprises call on the financial reform and innovation, and their development should be promoted by way of setting up risk investment funds, establishing second board market as early as possible and boosting the marketization of interest rate. In addition, the inside administration system of medium-and-small-seized enterprises should be established, and the control on risks and financial supervision should be strengthened.

Wu Dingfu: To Be Combined with Capital Market

Among the three, Wu Dingfu assumed his office earlier than the other two. Since his taking up office, Wu Dingfu has always been appealing to the narrowness of the channel for the usage of insurance capital and this time is without exception. According to him, the income of insurance fee saw a 44 percent growth in 2002, and the usable balance of insurance capital reached RMB 577.9 billion. It is forecasted that the usable capital of insurance industry will exceed RMB 1 trillion yuan by the end of the 10th Five-year Plan period.

Meanwhile, the problem that the channel for the usage of insurance capital is narrow has become more and more serious, and the most pressing matter for the moment is to form a benign circulation and component combination between insurance and capital markets. The value of a large number of incomes of insurance fee is maintained and increased to ensure adequate solvency in the future. Insurance capital can also provide powerful and steady financial support to capital market and improve the structure of capital market.

The agencies of insurance regulatory commission should study and establish the principles and specific methods on the ratio management of insurance capital. Insurance companies should separate the business of insurance acceptance from that of capital usage, and those, if conditions permitted, may set up an insurance capital management companies and so on.

(People's Daily April 22, 2003)