The 2007 China International Private Equity Forum was a grand affair for the international financial industry. It was the first conference to connect private equity funds and business enterprises in China.

In preparation for the Forum, the Organizing Committee worked hard and offered road shows in 36 domestic and international cities. There were 1,390 enterprises from 19 countries and regions attending the Forum. Among them, there were 207 private equity funds with $471 billion assets under management. There were more than 900 privately held enterprises with over RMB 800 billion yuan of total assets. In addition, there were many commercial banks, insurance companies and media firms participating. During the Forum, there were more than 10 events for participants including Speed Dating between private equity funds and enterprises, panel discussions, the 2007 China M&A Annual Conference, and the Third China Private Economy Development Forum. There were more than 3,000 participants attending the events. The Forum was the largest capital-raising event to date and included rich content and significant themes.

The objectives of this year's Forum are as follows:

Global capital flows are achieved through international stock markets, company direct investment and private equity. In 2006, global direct investment amounted to $1.23 trillion US dollars, an increase of 34.3% compared to the prior year. Private equity reached $738 billion US dollars, increased 100% from the previous year. China continues to attract foreign direct investment, and will also attract additional private equity to invest in domestic enterprises. With strong economic growth and increased foreign exchange reserves, the outflow of Chinese capital is increasing. In 2006, China's direct investment in foreign countries increased 56% compared to the year before. We have established the National Foreign Exchange Investment Company, allowing qualified domestic institutional investors (QDII) to help Chinese residents invest in foreign markets. The Forum will help advance international capital flows efficiently and effectively.

How to increase direct investments is one of the urgent issues in the current reform. In addition to expanding equity and fixed income offerings, we need to open and expand financing avenues for industrial investment funds. Tianjin Binhai New Area has been approved by the State Council to be a pilot area for the country's comprehensive financial reform. We consider the development of industrial investment funds as the focus of financial reform. To push this effort forward, Tianjin established the first Bohai industrial investment fund with RMB 20 billion yuan investment in China. A fund management company was also created. We need to gradually develop different types of industrial funds with various functions in order to promote Tianjin Binhai New Area as an integrated industrial investment zone. The success of the Forum will certainly accelerate the development of an international platform for investment and capital-raising.

The Forum will help many foreign private equity funds invest in small to medium-sized Chinese enterprises. This will not only enable foreign retail investors to invest in China, but will also enable domestic Chinese companies to raise foreign capital. Currently, there are more than 40 million of small to medium sized enterprises (SMEs) in China, accounting for 98% of all enterprises in China. These SMEs also account for 50.2% of total tax revenues. The Forum will create a bridge connecting investors and companies seeking capital. It will help enterprises gather capital and improve their capital structures.

The State Council’s goal is to continue to have the special economic zones and the Shanghai Pudong New Area play active roles in economic development, and to accelerate growth in the Tianjin Binhai New Area. The Tianjin Binhai New Area has become another economic growth region similar to the Shenzhen Special Economic Zone and Shanghai Pudong New Area. We need to develop the Tianjin Binhai New Area so that it can become the gateway for the northern China, a modern manufacturing base, a research and development center, an international shipping and logistics center in the north, and a new ecological urban area. The development of the Binhai New Area should help Tianjin city to become an international port city, the economic center in the north and an ecological city. The Forum hosted in Tianjin should help increase global capital flows, create a direct financing platform, and improve the growth of the service industry. The Forum should also foster the development of the urban areas of Beijing, Tianjin and Hebei, Bohai Rim and Northeast Asia, and create an international and professional capital-raising environment.

Guests and friends, we sincerely hope that with the combined efforts made by all participants, the Forum will be successful, and through these efforts we can make the conference next year successful. We also hope that people from all over the world can support China's Bohai Rim regional economic development, and achieve a win-win situation in the international arena. Finally, I wish the China International Private Equity Forum a big success!