Secondly, please allow me to brief you the reform measures we have recently adopted.
The 12th Five-Year Plan highlights the importance of the capital market in China’s economic growth and development. In recent period, we have taken significant measures to deepen capital market reform.
First, to further loosen governmental direct control. Regulators shift their focus from market access control to supervision on behavior and operation. Last year, we have dismantled 35 approval items. Another 10 items will be cancelled after law amendment.
Second, to encourage long term investment. We have adopted a differentiated dividend tax policy for retail investors based on holding period. We have improved and encouraged the employee-holding schemes. To reduce trading costs, the exchanges have lowered charges and fees three times last year.
Third, to deepen IPO reform. Attention has been shifted from a material judgment on profitability to information disclosure in IPO reviews. We will tighten the scrutiny on pricing for IPOs, improve the pricing mechanism, and reduce speculation of new shares on the secondary market, so that the primary market and the secondary market can develop in a balanced way.
Fourth, to improve delisting system. Based on the previous delisting system, we have introduced several market-oriented criteria, established risk warning system and a preparation mechanism, and allow failed companies to relist after restructuring. Now, listed companies can enter or exit the market, or they can even choose to delist voluntarily. Delisting will become more regular.
Fifth, to increase dividend payout by listed companies. While fully respecting the autonomy of listed companies, we encourage them to formulate on-going cash dividend payout policies and decision making mechanisms, which should be clear and transparent. Currently, the dividend yield ratio for large listed companies or blue-chips in particular, is not only higher than that in other emerging markets, but also outperforms some mature markets. For example, the dividend yield ratio for CSI 300 index reached 2.66% in 2012, compared with 2.24% for S&P 500 index.
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