CONTENTS

B.1　General ReportChina’s Monetary Policy and Financial

System in 2011 / 001

1. Economic Background for Monetary Policy in 2011 / 001

2. Monetary Policies and Financial Markets in 2011 / 005

3. Monetary Policy Operations in 2011 / 029

BⅠ　The First PartDevelopments of China’s

Financial Industries

B.2　Sub-report 1　Banking Industry in 2011 / 039

1. Overview of the Industry / 039

2. Operational Status / 042

3. Regulatory Environment / 049

4. Reform and Innovation: Small and Micro Enterprises Loan / 062

B.3　Sub-report 2　Securities Industry / 065

1. General Operational Status / 065

2. Investment Management and Futures / 070

3. Debats on Futher Reforms / 071

B.4　Sub-report 3　Insurance Industry / 078

1. Developments and Features in 2011 / 078

2. Important Issues and Policies in 2011 / 085

3. Opening Up: Ten Years after WTO Accession / 091

4. Problems and Difficulties / 096

5. Outlook in 2012 / 099

B.5　Sub-report 4　Reform and Innovation in Financial Regulation / 104

1. Strengthening Supervision and Issuing New Regulations / 104

2. Rectifying Key Areas and Preventing Potential Risks / 108

3. Improving Financial Institution and Encouraging Innovation / 114

4. Enforcing Laws and Protecting Consumers / 117

5. Supporting Real Economy and Serving Industrial Restructuring / 121

6. Enhancing Foreign Exchange Management and Promoting

RMB Internationalization / 126

7. Outlook in 2012 / 129

BⅡ　The Second PartState of China’s

Financial Markets

B.6　Sub-report 5　Monetary Market / 132

1. Trading Volume and Structure / 132

2. Interest Rate Dynamics / 141

3. Capital Flows / 146

4. Some Theoritical Issues / 148

5. Outlook in 2012 / 151

B.7　Sub-report 6　Wealth Management Market / 153

1. Overview of the Market / 154

2. Hot Issues / 159

3. Regulatory Dynamics / 167

4. Outlook in 2012 and Policy Recommendations / 169

B.8　Sub-report 7　Debt Market / 172

1. Overview of the Market / 172

2. Interest Rate Products / 187

3. Credit Products / 193

4. Derivative Products / 200

5. Main Features of the Debt Market / 202

6. Outlook in 2012 / 210

B.9　Sub-report 8　Stock Market / 215

1. State of the Market / 215

2. Outlook in 2012 / 220

B.10　Sub-report 9　Future Market / 227

1. Overview of the Market / 227

2. Policy and Institutional Reform / 237

3. Some Theoretical Issues / 241

B.11　Sub-report 10　Foreign Exchange Market / 248

1. Foreign Reserve and Foreign Exchange Management Policy / 248

2. Market Dynamics / 252

B.12　Sub-report 11　Balance of Payments / 257

1. General Overview / 257

2. Changes in Current Accounts / 259

3. Changes in Capital and Financial Accounts / 267

4. Balance of Payments and Foreign Exchange Management

Policy Outlook / 274