2005 was a groundbreak5ng year for China with impressive achievements in financial sector restructuring and wider opening up of financial sector，and the financial system has become more resilient to potential financial risks．China Financial Stability Report 2006 aims to reflect the latest developments in a comprehensive manner and contributes to the PBC’S effort to assess financial stability．

　　China Financial Stability Report 2006 is structured as follows：Chapter Ⅰ provides an overview of financial stability in China；Chapter Ⅱ analyses the impact of macroeconomic performance on financial stability；Chapter Ⅲ to Chapter Ⅴ respectively discusses reform and development of the banking，securities and insurance industries and their impacts on financial stability；Chapter Ⅵ focuses on the development of integ rated financial services；Chapter Ⅶ discusses the relationship between financial market development and financial stability；Chapter Ⅷ explores the needs to establish deposit insurance system in China；and Chapter IX analyses operation and risk management of the payment system．The Report contains 18“boxes”that provide in-depth analysis of a number of significant issues that bear on financial stability．China Financial Publishing House contributed greatly to the Report．

　　Our aim is to present a dynamic and comprehensive picture of financial reform,development and stability in China over 2005．Yet given the limited knowledge of the authors and inadequate experience in evaluating financial stability．the report is certainly not perfect．We welcome suggestions　from the relevant government bodies，academia and all sectoi's of the society to help US improve financial stability analysis and evaluation methodology in future editions．