China witnessed another round of sustained, fast and steady growth in her national economy in 2006. The gross domestic product (GDP) grew by 10.7%, breaking through RMB 20 trillion yuan. The volume of exports and imports exceeded US$1.7 trillion, indicating that the implementation of "going out" development strategy has achieved new progress. China has become a dynamic powerhouse forging ahead world economic growth. Her influence in global economic, trade, investment and financial sectors has been increasingly important and apparent. The Export-Import Bank of China, namely China Eximbank, as an institution shouldering the responsibility of promoting international trade and economic cooperation, has made active and significant contribution in this regard.

For China Eximbank, annals of 2006 marked a year of reform and innovation, a year of fast growth and development, and a year of many fruits and achievement. Under the wise leadership of the Central Party Committee and the State Council, based on Deng Xiaoping's Theory and the key thoughts of "Three Represents", we have put into appropriate practice the philosophy of Scientific Development. As the Bank began to change its concept of business management and pulled off in its strategic transformation, it has further deepened internal reforms, accelerated financial product innovations, pioneered new businesses, and enhanced risk-proof capabilities. Work in all areas has secured remarkable progress, signifying a good beginning for the implementation of the "Eleventh Five-Year Plan."

In 2006, China Eximbank took the initiative to accommodate the changing environment, and put forward the strategic concept of gearing toward the type of bank for international economic cooperation. Business in every field has attained rapid and healthy growth. Volume of loans approved in 2006 amounted to RMB 208.1 billion, with the actual loan disbursement adding up to RMB 131.5 billion, increasing by 60% and 11% respectively year on year. With these credit facilities, the Bank has supported the export of electronic and machinery products as well as high and new technology products, the overseas construction and investment projects which are worthy of US$66.6 billion, and supported the imports of resources products, technology and equipment worthy of US$5.7 billion. At the end of 2006, the outstanding loans of the balance sheet stood at RMB 231.7 billion, increasing by 32%, while the outstanding of on-lending loans off the balance sheet as extended by foreign governments, stood at US$ 17.6 billion. Total assets of the Bank at year-end read RMB 402.9 billion.

Over the past year, centered on the state development strategy and major state goals, the Bank has remodeled its focuses and directions of development, renovated financial products and services, enhanced the incentives to encouraging the export of high and new-tech products, deep-processed agricultural products, and the support to the growth of small and medium-sized enterprises (SMEs). We have provided full support to Chinese enterprises on their route of "going out" to venture cross-country investment and business expansion, and escorted them to participate in international economic cooperation and competition.

We have carefully put into effect the Chinese government's commitment on providing official development aid to developing nations, and have successfully carried ahead the major work on the US$ 900 million preferential buyers' credit for economies of the Shanghai Cooperation Organization. In the meantime, we have actively supported the functions of the China -Africa Cooperation Forum Beijing Summit, the 15th Anniversary on China-ASEAN Dialogue, the Shanghai Cooperation Organization Summit, and etc. We have integrated "going out" efforts with the country's development aid, which has not only stimulated the export of Chinese products, technology and labor services, but also brought substantial benefits to the social and economic development of the recipient countries.

We have actively explored new modes of promoting international economic cooperation, and have disseminated a basket of cooperative models with developing nations. Such handlings have on the one hand accelerated the economic development of these emerging economies, and on the other hand opened new paths to assure China's energy and resources supply. At present, our Bank has started a series of cooperation projects with African nations, and won high praises and appreciations from them.

We have attached importance to the publicity of China's foreign aid policy, the path of realizing peace and development and the concept of building a harmonious world through the financial businesses we handled and the projects we supported so as to present China's international image as a member being civilized, open, inclusive and responsible in the global community. We have enforced communications with the World Bank, the OECD, etc so as to facilitate our cooperation with them and we hence contribute gracefully to a better external environment for China's economic and social development.

Based on the principle of effectively utilizing foreign funds, we have carried on well with the on-lending loans favored by foreign governments. As the Bank readjusted its loan directions and opened up businesses with more governments in newer varieties, it has forcefully escorted the construction of major projects in the country's infrastructure, medical care, sanitation, education, environmental protection, and agricultural development, etc. Through such implementations, the Bank has played an increasingly important role in the state Western Development Strategy and the Revitalization of the North-Eastern Old Industrial Bases, and hence coordinated the economic and social development between the urban and the rural, between the East and the West.

We have actively pushed forward financial product innovations. In 2006, we opened import credit service to support the import of advanced technology, key equipment and significant resources in urgent need to the domestic market. We started to provide export seller's credit for agricultural products to contribute to the construction of the socialist new countryside. We also extended export credit to SMEs, helping small companies enjoy the same financial services from big banks as offered to big clients. Besides, we offered financing support for a number of Taiwan-invested companies and promoted the friendly cooperation between the people across the Straits.

By learning advanced concept and good experience at home and abroad, we have further deepened internal reforms at the Bank, and optimized business process and formalities. With highlighted stress on an all-around risk management and internal control and fortified mechanism of marketing and business innovation, we are able to set up primarily an advanced institutional scheme that fits the state of arts of modern banking, a scheme that is business-development-oriented and targeted towards improving the market competitiveness and risk-hedging capacity of the Bank. All this paves the way for the Bank to realize its strategic transformation.

In 2006, we strived to change operation ideology and were consistent in enhancing our consciousness of efficiency and profit. We greatly reduced business losses thanks to the strengthened efforts in assets-liability management and intermediate business expansion. In addition, we further tightened risk management and internal control, and took effective measures to prevent and mitigate financial risks. We took high precautions against newly incurred none performing loans (NPLs), and adopted multiple measures to dissolve the existing NPL stockpiles. The year-end on-sheet NPL ratio read 3.47%, another "double fall" for the eighth consecutive year in terms of both the outstanding and the ratio of NPLs.

We have also tried many channels to raise funds in domestic and foreign currencies. In 2006 we successfully issued RMB 68 billion financial bonds and arranged domestic US dollar syndication of USD 760 million, which assured the Bank of enough funds in business operations. The international ratings of the Bank continued to be compatible to the sovereign ratings of the country.

Currently, the world economy is growing with a faster pace. International trade and cross-border investment are developing with a good momentum. The rapid development in bilateral, multilateral or sub-regional cooperation is beneficial for China to promote foreign trade, accept industrial transfer from global players, renovate the methods of utilizing foreign funds, and participate widely in international economic integration. However, we also need to notice that international environment is complicated and susceptible to change and risks, and there are still obvious contradictions and issues in China's economic and social development. In 2007, the domestic and international circumstances will not only pose new challenges to the reform and development of the China Eximbank, but also offer a good chance for the Bank to quicken its steps in transforming toward an international economic cooperation bank.

The year of 2007 is an important year for China to implement the "Eleventh Five-Year Plan", and it is also a crucial year for China Eximbank to realize its strategic transformation. In 2007, we plan to accelerate the transformation of our development strategy, and carry out the renovation of operation ideology, mode of development, business focus and operation-and-management mechanism. We will step up our internal reform and business innovation and improve our core competitiveness. We will give full play to our combined advantages, and arrange as a whole our business development plan and regional development plan, so that we could forge ahead a sustainable blueprint that uses policy business to interact with self-operated business or vice versa. Besides, we will optimize a correct path to handle the relationship among speed, quality, efficiency and profit, and continue to perfect our internal control and risk management mechanism. By so doing, we expect to achieve another fast year of development in every field of our business, and to embrace the opening of the 17th Party Congress with excellent performance.