The Shanghai and Shenzhen bourses have already seen a tremendous expansion. Together they hold over 1,000 listed stocks and the market capitalisation has already reached US$150bn, excluding those stocks held by the government. Mr Leckie said that when the government's holdings in state-owned enterprises' were taken into account, total market capitalisation was expected to exceed US$500bn next year.

According to Mr Leckie, there are several factors that would facilitate the growth of the Chinese markets. These include the fact that there are currently 52 million investors in China with total savings of US$760bn. Nearly 500 firms are waiting for a stock market launch in China, and it is forecast that there will be around 5,000 listed companies by 2010. However, Mr Leckie warned that market development was hindered by financial transparency, accountability and corporate governance.

China's application to join the WTO was now in its final stages. Work is already underway to merge China's two bourses, allow foreign investors to buy yuan-denominated domestic investors-only Class A shares and allow foreign insurers to sell more varied insurance products. Mr Leckie said WTO membership would revolutionise the China's financial industry and provide a more sound environment for various financial institutions: 'There is a very fundamental need to develop long-term institutional investment in China,' he said. Mr Leckie forecasts that long-term savings, pension funds, life insurance and mutual funds will grow significantly over the next two years.