Vice Minister Li, President Kuroda, distinguished guests, ladies and gentlemen.

This is an important day — we are marking a milestone in the development of China’s capital markets. I am proud that the International Finance Corporation could play a pioneering role in opening the Panda Bond market. The Bank Group wants to provide innovation that encourages wider access to financial resources for more businesses. Participating in the opening of the Panda Bond market is just one way of doing that.

Entrepreneurs and businesses need more options. Too often the growth of promising companies is stunted by lack of access to finance. Without a vibrant bond market, private companies are closed off from big investors and instead forced to rely only on the banks.

Developing a bond market isn’t magic. Or as they might say in the United States these days, or now in China, it’s not rocket science. It’s a process. So I am pleased that IFC could play a part in this process by introducing international practices in the areas of documentation, execution, and bond clearing.

IFC’s Panda Bond introduces a new top-rated benchmark to the market. That provides a valuable means of diversification and credit differentiation. It should accelerate the development of new financial vehicles such as fixed income mutual funds, which require the ability to select among a variety of instruments to be effective. The effect of a more vibrant bond market encourages large institutional investors, such as insurance companies, pension funds, and mutual funds that want access to high-quality term assets that vibrant bond markets can provide. These investors currently have limited investment choices and so they are effectively discouraged from growing at a pace that we would expect from a market like China’s.

Indirectly also, the Panda Bond market opening supports infrastructure development in China. Capital intensive projects that will require enormous amounts of capital in this country over the next few decades need to be able to structure long-term financing that the bond market is well suited to provide. So I hope that the Panda Bonds create a first step toward making the bond market a financing source for non-state companies and private infrastructure projects.

Six years ago, the International Finance Corporation was fortunate to have been the first international institution to invest in a Chinese bank. In that process, IFC learned just how important it is to support good practices to create models that can inspire further reform. Participation in the Panda Bond market offers a new opportunity to reform the financial sector in China. IFC has opened many bond markets around the world, but this transaction has the hallmarks of international issuer bond development with Chinese characteristics. One of the differences in this case is that IFC will not follow its standard practice of swapping the proceeds out of its domestic currency into foreign currency. IFC will instead use its the local currency proceeds to finance clients that need exactly this sort of financing to reduce their foreign exchange exposures and improve asset-liability profiles.

IFC will use proceeds from the bond to finance Anhui Conch Cement Company, Guangzhou Development Industry Holdings, and Chindex International’s United Family Hospitals. These companies, businesses, and practices support environment efficiency, meeting environmental challenges, or, in the last case, the private provision of health care — all of which are priorities of the Chinese government.

This inaugural renminbi issue is the outcome of 5 years of hard work. IFC would not have been able to open the Panda Bond market without the continued support and encouragement of the Chinese government, particularly the Ministry of Finance. IFC has worked very closely with the Chinese authorities, especially the Ministry of Finance, to address the many technical and regulatory issues in this pioneer bond launching. So I’d like to take this opportunity to congratulate the Ministry of Finance on spearheading this important initiative to develop China’s capital markets.

This is an important event in the development of China’s capital market, but it is just a step in a long-term process. Much work needs to be done to make the Chinese capital market more efficient and deeper so that it can meet the needs of businesses that fuel the economy and employ Chinese workers and finance a wide range of development and infrastructure needs that have made China a pioneer in poverty reduction around the world. IFC and the entire World Bank Group look forward to working with China, not only in this step of the process but in the many steps that lie ahead. We look forward to more opportunities to work together with the authorities toward common objectives for the poor people of this country.