《 China Financial Stability Report 2007》

     In 2006, China's Eleventh Five-Year Plan got off to a good start with major

achievements in economic and social development. The breakthroughs in

financial sector reforms and innovations, the enhanced role of financial policies

and services, and the improved financial supervision, regulation, as well as

legal system helped further strengthen the stability of financial system. The

China Financial Stability Report 2007 aims to reflect the latest developments in

China's financial sector reforms, opening up, and innovations, providing a

balanced assessment of financial stability in China.

        China Financial Stability Report 2007

CONTENTS

Overview 

Chapter I  Macroeconomic Environment  9

Chapter II  Banking Sector  ]9

Chapter III  Securities Sector and the Capital Market  33

Chapter IV  Insurance Sector  53

Chapter V  Financial Innovations  67

Chapter VI  Financial Safety Net and Financial Infrastructure  83

Special Topic 1  Asset Prices and Financial Stability  ]0]

Special Topic 2  International Experience in Agricultural Insurance and

                      Its Implications  ]09

Appendix I  A Quantitative Study of the Soundness of the Banking Sector:

                the Case of 16 Commercial Banks  125

Appendix II  Statistics  135

Boxes

     l. China's Economic Development Contributes to Economic Growth and Financial

         Stability Worldwide  12

     2. Risks Arising from Subprime Loans in the US  13

     3. Focuses of the Financial Stability Report by Other Countries  16

     4. Organization Innovation of Rural Finance  31

     5. International Experiences of Bond Market Development Modes  47

     6. Stock Index Futures  49

     7. ICBC's A +H Share Offering  51

     8. Perils of Underground Insurance  56

     9. Compulsory Traffic Accident Liability Insurance for Motor Vehicles  57

10. Catastrophe Insurance  64

11. International Developments of Financial Innovation  69

12. RMB Derivatives Innovation  72

13. The Launch and Closure of YinZhengTong  75

14. Commercial Banks' Financial Innovation: Credit Derivatives  77

15. Management of a City Commercial Bank Payment Risk and Its Implication  87

16. Payment System Automatic Pledge Financing Mechanism  93