 | |
 People's Bank head office in Beijing | |
| Headquarters | |
|---|---|
| Coordinates | Beijing 39°54′24″N116°21′14″E / 39.90667°N 116.35389°E /39.90667; 116.35389 |
| Established | December 1, 1948; 77 years ago (1948-12-01) |
| Key people | |
| Central bank of | China |
| Currency | Renminbi (RMB) CNY (ISO 4217) |
| Reserves | US$3.45 trillion(2023)[1] |
| Reserve requirements | 6.6%[2] |
| Bank rate | 3.4% |
| Website | www |
| People's Bank of China | |||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Chinese name | |||||||||||||||||||||
| Simplified Chinese | 中国人民银行 | ||||||||||||||||||||
| Traditional Chinese | 中國人民銀行 | ||||||||||||||||||||
| Literal meaning | China People Bank | ||||||||||||||||||||
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| Alternative Chinese name | |||||||||||||||||||||
| Simplified Chinese | 人民银行 | ||||||||||||||||||||
| Traditional Chinese | 人民銀行 | ||||||||||||||||||||
| Literal meaning | People Bank | ||||||||||||||||||||
| |||||||||||||||||||||
| Second alternative Chinese name | |||||||||||||||||||||
| Chinese | 央行 | ||||||||||||||||||||
| Literal meaning | Central Bank | ||||||||||||||||||||
| |||||||||||||||||||||
| Tibetan name | |||||||||||||||||||||
| Tibetan | ཀྲུང་གོ་མི་དམངས། མི་རྣམས།དངུལ་ཁང་། | ||||||||||||||||||||
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| Zhuang name | |||||||||||||||||||||
| Zhuang | Cunghgoz Yinzminz Yinzhangz | ||||||||||||||||||||
| Mongolian name | |||||||||||||||||||||
| Mongolian Cyrillic | Дундад Улсын Ардын Банк | ||||||||||||||||||||
| Mongolian script | ᠳᠤᠮᠳᠠᠳᠤ ᠤᠯᠤᠰ ᠤᠨ ᠠᠷᠠᠳ ᠤᠨ ᠪᠠᠩᠬᠢ | ||||||||||||||||||||
| |||||||||||||||||||||
| Uyghur name | |||||||||||||||||||||
| Uyghur | جۇڭگو خەلق بانكا | ||||||||||||||||||||
| |||||||||||||||||||||
| Portuguese name | |||||||||||||||||||||
| Portuguese | Banco Popular da China | ||||||||||||||||||||
ThePeople's Bank of China (officiallyPBC[3] and unofficiallyPBOC[4]) is thecentral bank of thePeople's Republic of China.[5] It is responsible for carrying outmonetary policy as determined by thePRC People's Bank Law and thePRC Commercial Bank Law.
The PBC was established in 1948 as the bank serving areas ofmainland China underChinese Communist Party (CCP) control and became China's sole central bank after thefounding of the People's Republic of China in 1949. From 1969 to 1978, the PBC was demoted to a bureau of theMinistry of Finance. The PBC was extensively reformed during the 1990s, when its provincial and local branches were abolished, instead opening nine regional branches. In 2023, these reforms were reversed as when the regional branches were abolished and the provincial branches restored, and new arrangements essentially ended the PBC's longstanding role infinancial supervision.
The PBC is the 25th-ranked of 26ministerial-level departments of theState Council.[6] The PBC lackscentral bank independence and is required to implement the policies of the CCP under the direction of the party'sCentral Financial Commission. The PBC is led by a governor assisted by several deputy governors and aCCP Committee Secretary. Since 2023, the roles of governor and CCP Committee Secretary have been held jointly byPan Gongsheng.[7]
The bank was established on 1 December 1948 by merger of three of several regional CCP-run financial entities, respectively the Huabei Bank (華北銀行, active inNorth China),Beihai Bank [zh] (inShandong), andXibei Farmers Bank [zh] (inNorthwestern China).[8]: 37 The new bank was first headquartered at the former Huabei Bank head office inShijiazhuang, then moved to Beijing in 1949. All other mainland Chinese banks were either liquidated or nationalized in the early 1950s, so that between 1955 and 1978 the PBC was the only bank in the PRC'ssingle-tier banking system and was responsible for allcentral banking andcommercial banking operations.[9]: 225 All other banks within mainland China such as theBank of China were either organized as divisions of the PBC,[10] or were non-deposit-taking agencies.[11][12]: 449
During theCultural Revolution, the PBC suspended its commercial banking service.[8]: 38 In June 1969, theState Council approved the consolidation of PBC's headquarters as a bureau within theMinistry of Finance.[8]: 38 In that context, the PBC's head office was downsized to no more than eighty staff.[5]: 58 Local PBC branches were correspondingly merged into local government finance departments.[8]: 38
The institutional demotion of the PBC was reversed in March 1978 as it was separated from the Finance Ministry and granted ministerial ranking.[5]: 62
By then and with the exception of special allocations for rural development, the monolithic PBC dominated all business transactions and credit. In 1979, China initiated a transition from thatsingle-tier banking system to a two-tier system, which was largely completed by 1984.[13]: 188–189 In March 1979, as part of thereform and opening up, the State Council split off state-owned banks from the PBC, first theAgricultural Bank of China (ABC) and theBank of China (BOC). ThePeople's Construction Bank of China, which had been run separately under the Ministry of Finance, was also made autonomous (and later renamedChina Construction Bank in 1986). In January 1984, the PBC's own commercial banking operations were spun off as theIndustrial and Commercial Bank of China (ICBC).[5]: 63 [12]: 450 In September 1983, the State Council had promulgated that the PBC would function exclusively as the central bank of China and no longer undertake commercial banking activities.[8]: 42
Modernization efforts continued in the late 1980s and early 1990s. In 1990, the PBC moved into its new head office building, prominently located onWest Chang'an Avenue.[14]: 47 In 1991, Vice GovernorChen Yuan spearheaded the creation of the Electronic Interbank System (EIS), the PBC's first state-of-the-artfinancial market infrastructure.[5]: 285 In 1992, however, the PBC had to reluctantly concede the spinning off of its securities regulatory duties to the newly establishedChina Securities Regulatory Commission,[5]: 149 whose first chair was former PBC vice governorLiu Hongru.
As part of the State Council's 1993 Resolution on Financial System Reform and its effort to modernize the financial sector, the PBC was assigned the role of managing the currency and preserving macroeconomic and financial stability.[15]: 36
The bank's profile was greatly raised by the appointment ofZhu Rongji as its governor in 1993, simultaneously as his role asVice Premier in charge of economic and financial affairs.[5]: 125 Its central bank status was legally confirmed on March 18, 1995, by the 3rd Plenum of the8th National People's Congress, and was granted a higher degree of autonomy than other State Council ministries by an act that year.[13]: 203 In 1996 and 1996, the PBC established fundamental regulations on loans and consumer credit.[16]: 20
In 1998, the PBC underwent a major restructuring. All provincial and local branches were abolished, and the PBC opened nine regional branches, whose boundaries did not correspond to local administrative boundaries.[17] The nine branches were located inChengdu,Guangzhou,Jinan,Nanjing,Shanghai,Shenyang,Tianjin,Wuhan, andXi'an, complemented by a sub-provincial network of city-level and county-level sub-branches.[5]: 144 That same year, the so-called credit plan, a key feature of China's former state planning process, was finally abandoned, allowing the PBC to play a genuine role as monetary policy authority.[5]: 99
In 2003, theStanding Committee of the National People's Congress approved an amendment law for strengthening the role of PBC in the making and implementation of monetary policy for safeguarding the overall financial stability and provision of financial services.[citation needed] That year, the long overdue restructuring of China's banking sector made major progress with the creation ofCentral Huijin Investment, a PBC-managed fund that allowed the PBC to take the lead from theMinistry of Finance on the restructuring process and from theCCP Central Organization Department on the appointment of senior bank executives.[5]: 279-281 That same year, however, the PBC reluctantly lost its direct authority over banking supervision with the creation of theChina Banking Regulatory Commission.[5]: 149
In 2005, the PBC elevated its branch inShanghai to the status of "second head office", in a move intended to mirror the prominent market-facing role of theFederal Reserve Bank of New York within the USFederal Reserve System.[5]: 123 In 2006, the PBC established the Credit Reference Centre to provide financial credit reporting.[16]: 47 In 2008, the PBC lost the direct ownership stakes it had built up in much of China's financial sector as the ownership of Central Huijin was transferred to theChina Investment Corporation (CIC), a newly createdsovereign wealth fund.[5]: 287
During theGreat Recession, the PBC helped address bank liquidity crisis by signing swap agreements with numerous other countries to provide them with liquidity based on therenminbi.[18]: 267 As of 2021[update], China has swap agreements with 40 countries.[18]: 271
In 2010, the PBC issued administrative measures regardingonline non-financial payment services.[19]: 33 These measures retroactively recognized the legal status of online third-party payment platforms likeAlipay.[19]: 33 Prior to the 2010 measures, these services existed in a legal grey area.[19]: 32
In 2015, the PBC hosted China's first formaldeposit insurance scheme.[20] In 2019, this scheme was reorganized as a subsidiary of the PBC, the Deposit Insurance Fund Management Company.[21] Meanwhile, in 2017, the PBC was tasked with the secretariat of China's newly establishedFinancial Stability and Development Committee chaired by Vice PremierLiu He. In 2020, the PBC initiated supervision of significantfinancial holding companies.[22]: 6–7
The PBC underwent through another major restructuring in 2023 as part of theplan on reforming Party and state institutions, with the abolition of the nine regional branches established in 1998, which had already seen their authority watered down by a change in 2004 that had returned authority to the PBC's branches at the provincial level and further changes in 2018.[23][17] Additionally, the PBC's county-level branches were absorbed by city-level branches.[24] The new branches were inaugurated on August 18, 2023.[25] The oversight over financial holding companies and financial consumer protection was also transferred from the PBC to the newly establishedNational Financial Regulatory Administration (NFRA).[24] Around 1,600 county-level branches of the PBC are planned to be absorbed to the NFRA; the PBC had 1,761 such branches at the end of 2021.[26]
The PBC is acabinet-levelexecutive department of theState Council.[13]: 203 The top management of the PBC are composed of the governor and a certain number of deputy governors. The governor is nominated by thepremier of the State Council, who is then approved by theNational People's Congress or itsStanding Committee and appointed by thepresident.The deputy governors of the PBC are appointed to or removed from office by the premier.[27]
The PBC adopts the governor responsibility system under which the governor supervises the overall work of the PBC while the deputy governors provide assistance to the governor to fulfill his or her responsibility. The current governor isPan Gongsheng. Deputy governors of the management team include:Zhu Hexin,Zhang Qingsong,Xuan Changneng,Lu Lei, andTao Ling.[28] The PBC does not havecentral bank independence and is required to implement the policies of theChinese Communist Party (CCP).[29] It operates under the direction of the CCP'sCentral Financial Commission.[26] TheCCP committee secretary of the PBC is the most powerful position in the bank and can hold more sway than the governor.
The current CCP committee secretary is Pan Gongsheng.[30]
The PBC Monetary Policy Committee is an advisory body chaired by the PBC governor. It typically includes the directors and deputy directors of other financial agencies, as well as a few influential academic economists.[31]
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The current head office building of the PBC was inaugurated in 2021 onBeijing Financial Street in Beijing. It replaced an earlier building borderingWest Chang'an Avenue, constructed in 1987–1990 on a design by a team of architects led by Zhou Ru.[14]: 49 That building's shape referred to two traditional Chinese motifs, namelyyuanbao ingots and "wealth vases" (Chinese:Jùbǎopén) from Chinese folklore.[14]: 176 It remains used by the PBC following the 2021 relocation.
As of 2019[update], the PBC consisted of functional departments (bureaus) as below:[32]
The PBC has branches in each 31provincial-level administrative divisions in China, branches in five cities (Shenzhen, Dalian, Ningbo, Qingdao, and Xiamen), and 317 branches inprefecture-level divisions.[25]
It has 6 overseas representative offices (PBC Representative Office for America, PBC Representative Office (London) for Europe, PBC Tokyo Representative Office, PBC Frankfurt Representative Office, PBC Representative Office for Africa, Liaison Office of the PBC in the Caribbean Development Bank).
The following enterprises and institutions were directly under the PBC as of 2012:[33]
The PBC is active in promotingfinancial inclusion policy and a member of the Alliance for Financial Inclusion.[34]
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Since the early 2000s, the PBOC has progressively integrated sustainability into its prudential and monetary policy framework, steeringgreen finance in China. This evolution began in the mid-2007 with the "Guidelines on Credit Work for Energy Conservation and Emission Reduction" guidelines policy, but accelerated significantly in 2016 with the release of the "Guiding Opinions on Building a Green Financial System".[35][36] Following China's climate commitment, the PBOC further elevated green finance to a macro-strategic priority, aligned with the national "Five Key Pillars" strategy announced in 2024 by the State Council.[37] The People's Bank of China also plays an international role in this field. It is a founding member of theNetwork for Greening the Financial System (NGFS), which was launched in 2017.
The People's Bank of China's policy strategy traditionally relied on informal "window guidance". From 2007 the central bank informally nudged banks away from originating new credit from high-polluting sectors. It has since evolved towards using more market-based instruments to align with China's maturing financial system.[38] The following key policy instruments have been implemented:
The PBOC's proactive stance has been recognized internationally; an international ranking by the think tankPositive Money ranked PBoC' green policies as the most developed among theASEAN Plus Three nations, achieving the highest scores in both monetary and financial policy categories.[44]
Studies suggest that the PBoC's lack of political independence allows it to implement direct green monetary policies more effectively than its Western counterparts, which are often guided by the principle of "market neutrality".[45][46][47][48]
Beijing has little tolerance for any talk of central-bank independence; the monetary authority, just like any other part of the government, answers to the party.
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