The People s Bank of China was set up on 1st December 1948. The bank was established after the merger of Huabei Bank, Xibei Farmer Bank and Beihai Bank. The State Council opted to let PBC operate as a central bank during September 1983.
The 3rd Plenum of the 8th National People s Congress adopted the Law of the People s Republic of China on the People s Bank of China on 18th March 1995. This formally established PBC as a central bank. Zhou Xiaochuan is currently the Governor of the bank.
Central Bank of China – Roles and Responsibilities:
The socialist market economic set-up of China is gradually improving and this means that the role being played by the bank will become more important in the macroeconomic management procedures.
The functionalities of the PCB have been approved as per the improved Law of the People s Republic of China on the People s Bank of China, which had been adopted by the 6th meeting of the Standing Committee of the 10th National People s Congress on 27th December 2003. They are summarized as below:
Implementing and creating laws, regulations and rules that are integral to its operations
Creating rules for settlements and payments that are in line with requirements of various departments and making sure that these systems operate normally
Executing and making monetary policies as per the laws
Monitoring fund operations that could be involved in money laundering and guiding the financial sector in its operations against money-laundering
Management of currency issuance and circulation
Developing statistical systems for the financial sector and consolidating financial data along with economic predictions and analyses
Controlling the financial markets. This includes the inter-bank lending markets, forex markets, inter-bank bond markets, and gold markets
Promotion of the establishment of credit information systems and managing the national credit reporting industry
Moderating and stopping the risks regarding fiscal stability
Taking part in financial operations outside China as a central bank
Making sure that the currency exchange rate is proper and flexible. Management and possession of state reserves of gold and foreign exchange
Taking part in business and financial operations as per rules
Management of the national treasury as a financial representative
Executing the assignments from the State Council
Central Bank of China – Monetary Policy:
Following are the various monetary policy instruments of the People s Bank of China:
Reserve requirement ratio
Central bank lending
Central bank base interest rate
Open market operations
In addition to these, the PBC also uses policy instruments that are backed by the State Council. The basic aim of its monetary policy is to make sure that the value of the Renminbi is stable, which ultimately leads to economic growth.
As stipulated by the Article 12 of the Law of the People s Republic of China on the People s Bank of China the role of the PBC s Monetary Committee may be described as below:
It operates as an advisory body for the PBC and assists it with the framing of monetary policies and targets.
The committee can also provide suggestions regarding how these targets and policies could be changed.
It can also advise the PBC regarding how important instruments of the monetary policy can be applied and what steps can be taken regarding the same.
It suggests the PBC regarding the synchronization of the macroeconomic and monetary policies.
It carries out a comprehensive research of macroeconomic goals of the government and the macroeconomic conditions before providing its suggestions.
The following entities make up the PBC Monetary Policy Committee:
Chairman of China Securities Regulatory Commission
PBC Deputy Governors
Chairman of China Insurance Regulatory Commission
Vice Minister of the State Development and Reform Commission
Commissioner of National Bureau of Statistics
Vice Finance Minister
President of the China Association of Banks
Administrator of the State Administration of the Foreign Exchange
An academic expert
Chairman of China Banking Regulatory Commission
The committee carries out its operations through quarterly meetings that are organized on a regular basis, and the ad-hoc meetings.
Central Bank of China – Publications:
The following publications are brought out on a regular basis by the People s Bank of China:
China Financial Stability Reports
Central Bank of China – Contact Details:
Given below are the contact details of the PBC:
No.32 Chengfang Street, Xi Cheng District,
Post Code: 100800
Last Updated on : 30th July 2013