Speech by Mr. Tu Guangshao,

Vice-Chairman of the China Securities Regulatory Commission,

Chief of the Leading Group for the First National Census of Securities Industry

at Mobilization Conference for the First National Census of Securities Industry

February 3, 2005

Comrades,

According to the Circular of the State Council on Inauguration of the First National Economic Census (the National Census), the first National Census on Securities Industry ( the National Securities Census) was initiated in June, 2004 as part of the National Census. With concerted efforts and hard work of various units and departments, everything is going on smoothly with census preparations and the Securities Census has come to implementation phase since January, 2005. Today we hold the Mobilization Conference for the First National Census of Securities Industry to review performance in the previous preparatory stage and look at arrangements for the next stage of census work. I’d also like to take the chance to encourage your full involvement, close cooperation and focused effort for the coming census work in a bid to achieve our goals of the Securities Census. Next I will focus on three key points:

1.　　  Knowledge of the Significance of the Securities Census

With a view to drawing an economic panorama of China’s secondary and tertiary industries, the State Council decided on undertaking of the First National Economic Census during the period of 2004 and 2005 at its 28th Executive Meeting in November 2003, following which, the Circular of the State Council on Inauguration of the First National Economic Census was issued in December 2003 while the Leading Group for the First National Economic Census under the State Council (the Leading Group) and its office were established and headed by Mr. Zeng Peiyan, Vice-Premier of the State Council. In September 2004, Premier Wen Jiabao signed a decree of the State Council to promulgate the Regulations on National Economic Census, providing legal protection and institutional framework for the economic census.

The CPC Central Committee and the State Council have placed a great deal of emphasis on the National Census. Vice-Premier Zeng Peiyan attended several special reporting meetings of the National Census. In June and November 2004, he urged local statistical units nationwide to “Reinforce the Administration of the National Census”, “Diligently Perform Duties of Organizing, Promotion, Education and Statistical functions”, “Ease the Fears of the Respondents of Census” and “Ensure Effective and Smooth Progress of the National Census”. On December 17, 2004, Mr.Zeng Peiyan visited the Sub-district Office of Huayuan Rd. of Haidian District of Beijing, 9588.com and Datang Telecom Science &Technology Industry Group, encouraging census enumerators to keep up with their hard work for the success of the National Census.

The National Census is designed to assess overall national conditions and strength. It’s a fundamental economic activity of China for 2005 and 2006; it’s pivotal for the government to outline macro-economic policy, evaluate and formulate plans for economic and social growth, and to enhance the flexibility of macro-control using statistics on scales, structures and economic results of China’s second and tertiary industries. For enterprises, they can use these data to find out what’s happening in their own industries or other sectors, and to effectively develop or modify business strategies. Therefore, the National Census represents common interests of our nation and the general public.

The CSRC is authorized by the Leading Group to organize and conduct the Securities Census. As a part of the National Census, good performance of the Securities Census will endorse the National Census. It’ll provide an overall picture of the securities industry, which is the basis for us to arrive at solutions to various fundamental problems inherent in China’s securities market, evaluate and form long-term development strategies and improve the statistical system and statistical statement system of the industry.

The outstanding achievement of China’s securities market over the last decade has seized the attention of the world. By December 2004, there are a total of 1377 listed companies with a combined market cap of CNY3.7056 trillion. However, complex factors have created various problems for China’s securities market, such as the lack of sound structure and functions of the securities market and poor governance structure of market players, as well as those left over from the past. To address these problems, much more can be done than to seek advices or learn from other mature markets. The key solutions lie with pragmatic and feasible policies and measures properly reflecting the nature of China’s securities market. Therefore, it’s extremely important to measure the securities industry for optimization of the market.

2. Key Problems We Are Facing

The CSRC has given top priority to the Securities Census and has regarded the securities Census as its top statistical job for 2004 and 2005. Upon receiving the notice issued by the Leading Group of the State Council on the First National Economic Census, the CSRC promptly saw to recruitment of census staff, institutional arrangement and funding to pave the way for the Securities Census, which is called “Three Allocations”. So far we’ve been through the preparations with concerted efforts and cooperation of relevant departments. However, we must take steps to address some problems encountered during the preparation stage:

First, some of the institutions have to improve their knowledge of the significance of the National Census, which is indispensable to understanding our national conditions and strength for sound national policy making, and is aimed to promote the principle of scientific development, enhance the capability of steering China’s market economy, and strengthen macro-control. The National Census is even more critical to China’s fledgling securities industry. It will not only enable the government to better understand the capital market and make more rational market supervision policies, but also allow different entities to identify their market positions and blueprint more practical development strategies. However, we are aware that some of our senior officials have not made themselves fully understand the significance of the census and attached importance to it. Some of them did just enough to get by. Some of the units failed to assist with consultation work and trial survey citing tight schedule or lack of hands; some even displayed resistance to the Census. Such attitudes and behaviors have more or less undermined the census work. Today I’m just addressing the problems with no intention to unveil such units. However, all units shall learn a lesson and avoid making the same mistakes in the future. Otherwise, we will take severe actions according to relevant regulations.

Second, some units have some doubts about the census content, which covers information on assets, operations and staff costs. They are worried about privacy or inconsistency between figures to be collected by the Census and those disclosed in the past. I can assure you that there is no need to worry. Economic census bodies and personnel are obliged to keep all data from respondents confidential under the Census Regulations and the “Measures on First National Census of Securities Industry” (the Securities Census Measures). Disclosure of census data will be dealt with seriously. Meanwhile, the State Council undertakes that the use of census data will be strictly limited to economic purposes and shall not be used by any unit as the basis for imposing penalties against respondents of economic census. Vice-Premier Zeng Peiyan once pledged confidentiality of data at the third plenary meeting of the Leading Group. Here I’m giving you my word that census data will not be used by the CSRC or any other departments as evidence for penalties against any units for past breaches. So don’t’ worry and do provide accurate data.

3. Requirements for Next Stage of Census Work

The Securities Census will enter into a crucial stage from 2005. To ensure smooth progress of the Securities Census, I would like to set forward two requirements targeted at problems arising from previous stage:

First, with full understanding of the importance of the census work,  you should endeavor to ensure a successful execution. As a fledgling industry, China’s securities sector is in need of a sound statistical system and structure compared with other traditional sectors. In addition, data on assets and operations of some of the securities institutions are not covered in industry statistics. For a long time we were more focused on market development and regulation while neglecting the collecting and processing of basic industry information, especially information less related to market. Presently we still lack a full and proper understanding of the industry in relation to its size, asset status, operational efficiency and employee mix. The First National Economic Census will afford us the opportunity to establish a sound statistical system and industry database. Therefore success of the National Census is of great significance to the securities industry. All of the departments and units concerned shall take the Census seriously and make it a top priority for 2005; use your endeavor in carrying out obligations include organizational arrangement, publicity, promotion and data processing. You should establish segregation of duties and assignments of responsibilities; see to allocations of funds, staff and facilities for the census according to the Measures on Securities Census. Take the challenge ahead and do your best to ensure the success of the Census.

Secondly, all parties concerned should demonstrate compliance with the census law and regulations; respond honestly to the census and ensure the accuracy of the census data. It’s the obligation of every citizen and legal person to accept, assist and cooperate with the census taken by the government, especially such a significant national census. Here I urge all parties concerned to strictly comply with census laws and regulations. It’s illegal to resist survey, report false entries or conceal economic census data. Under provisions 8 and 9 of the Census Regulations, “Respondents of economic census have the obligation to take the survey conducted in accordance with the law by economic census bodies and economic census personnel. Respondents of economic census shall fill in economic census forms in a truthful and timely manner, and shall not make false entries, conceal economic census data, refuse to submit economic census data or delay submitting such data.” Reliable results are vital for the success of the Census. The government has injected a great deal of human capital and financial resources into the census work to obtain sound and timely economic data that will power economic policy making and development planning, which is commonly pursued by the nation, the business and individuals. Thus it’s in the interest of every respondent to fulfill the obligation of providing accurate census data. Provision 25 of Regulations on National Economic Census stipulates that “Economic census bodies and personnel at all levels shall independently perform their functions and powers of surveying, reporting and supervision in accordance with the law, and they shall not be interfered by any unit or individual. Leading members of local authorities, departments and units shall not, without authorization, alter the economic census results, and shall not compel or prompt economic census bodies or personnel to tamper with the economic census results or fabricate false data.” To ensure the accuracy of census data, severe punishment will be imposed on those units or individuals, who make false entries, conceal economic census data according to relevant provisions of Statistics Law and the Census Regulations. Legal prosecution will be taken in case that the violation constitutes a criminal offense. Recently a number of typical offenses were publicized by the National Bureau of Statistics earlier on a TV program called “Focus Interview”, which has proven to be an effective educational means. We will also expose typical cases of offenses as well as compliances. Public commendation and award will be given to the units and individuals that have made outstanding contributions to the work of the Securities Census; while those found to be uncooperative will be censured publicly and punished severely. It’s my hope more positive stories be told when census work concludes at the end of 2005.

Comrades, the countdown has begun for the launch of the crucial section of census work. I propose that all relevant units and departments concentrate on the census work, conduct survey according to the law, ensure the accuracy of census data and throw away misgivings. Finally, let’s work hard together to make the Securities Census a success with cooperation, diligence and integrity.  

The China Securities Regulatory Commission