This is a prospective, randomized, open-labeled, controlled design to assess the effects thiozolidinediones on the diabetic retinopathy and nephropathy. The investigators will recruit 300 type 2 diabetic patients without significant retinopathy, nephropathy and cardiovascular disease. Inclusion criteria are type 2 diabetes, age between 30-80 years old, with microabluminuria, no significant retinopathy, on submaximal dose of sulphonylureas and metformin treatment, and A1C between 7-9%. Exclusion criteria are on insulin treatment, significant retinopathy and significant nephropathy. Patients with cardiovascular diseases, malignancy, pregnancy, in acute intercurrent illness, congestive heart failure, myocardial infarction, received PCI or CABG. All subjects will receive EKG and CXR before randomization.