Implement Market innovation, Strengthen Enforcement and

Promote Standardization

Presented by vice chairman, Mr. Geng Liang

China Securities Regulatory Commission

12-13 March, 2001, Kuala Lumpur

International Backgrounds

• Global integration

• Cooperation between regulators

• Merger or alliance between exchanges

• Growth enterprise market

• On-line trading

By the end of 2000:

• Listed companies: 1088 domestic; 52 overseas; 145 in 2000

• Capitalization: RMB 4.8 trillion ( 1 USD = 8.3 RMB ), 50% GDP, 25%

• Investors accounts: 5.8 million

• Turnover: RMB 6 trillion, 91%

Market Statistics

Market Statistics (continued)

• Daily average turnover: 25.3 billion, 94%

• Composite index:

Shanghai: 2073, 51% ; Shenzhen: 635, 57%

• Max. Volatility:

Shanghai: 50% , Shenzhen: 57%

• Highlights: table market movement, increasing turnover and growing confidence.

Latest Developments

• Increasing direct financing scale

• Setting up securities investment funds

• Fostering On-line trading

• Preparing the establishment of Growth Enterprise Market

Latest Developments (continued)

• Strengthening enforcement

• Improving corporate governance

• Permitting B share trading by domestic residence

Strengthening regulation

• Reinforcing enforcement capability

• Strengthening penalty

• Enhancing investor education

• Studying and learning from overseas experiences

Going Marketization-- Deregulation

• Reducing administrative intervenes, playing by market rules

• while strengthening legislation, enforcement and investor education

Going Marketization-- Deregulation (continued)

Concrete measures have and about to take:

• Reform in stock issuance mode

• Reform in stock pricing mechanism

• Requirements of risk control management

• Implementing market innovation

• Further opening-up

Conclusion

• The Chinese securities market will continue to enjoy rapid developments

• It will gradually integrate into the world market