People's Bank of China


The People's Bank of China (PBC or PBOC; simplified Chinese: 中国人民银行; traditional Chinese: 中國人民銀行; pinyin: Zhōngguó Rénmín Yínháng) is the central bank of the People's Republic of China responsible for carrying out monetary policy and regulation of financial institutions in mainland China, as determined by People's Bank Law and Commercial Bank Law. Valued at US$3.21 trillion,[1] the People's Bank of China has had the largest financial asset holdings of any central bank in the world since July 2017.[4][5] Though possessing a high degree of independence by Chinese standards, it remains a cabinet-level executive department of the State Council.[6]

People's Bank of China
中国人民银行
Zhōngguó Rénmín Yínháng


People's Bank of China headquarters in Beijing
HeadquartersBeijing and Shanghai
Coordinates39°54′24″N 116°21′14″E (Beijing)
Established1 December 1948; 72 years ago (1948-12-01)
OwnershipState Council of the People's Republic of China
Party Secretary
Governor
Guo Shuqing
Yi Gang
Central bank of People's Republic of China
CurrencyRenminbi (RMB)
CNY (ISO 4217)
ReservesUS$3.21 trillion (November 2017)[1]
Reserve requirements17%[2]
Bank rate4.3%[3]
Interest on reserves3.5%
Websitewww.pbc.gov.cn/en/3688006/index.html
People's Bank of China
Chinese name
Simplified Chinese中国人民银行
Traditional Chinese中國人民銀行
Literal meaningChina People Bank
Alternative Chinese name
Simplified Chinese人民银行
Traditional Chinese人民銀行
Literal meaningPeople Bank
Second alternative Chinese name
Chinese央行
Literal meaningCentral Bank
Tibetan name
Tibetanཀྲུང་གོ་མི་དམངས། མི་རྣམས།དངུལ་ཁང་།
Zhuang name
ZhuangCunghgoz Yinzminz Yinzhangz
Mongolian name
Mongolian scriptᠳᠤᠮᠳᠠᠳᠤ
ᠤᠯᠤᠰ ᠤᠨ
ᠠᠷᠠᠳ ᠤᠨ
ᠪᠠᠩᠬᠢ
Uyghur name
Uyghurجۇڭگو خەلق بانكا

History


The bank was established on December 1, 1948, based on the consolidation of the Huabei Bank, the Beihai Bank and the Xibei Farmer Bank. The headquarters was first located in Shijiazhuang, Hebei, and then moved to Beijing in 1949. Between 1950 and 1978 the PBC was the only bank in the People's Republic of China and was responsible for both central banking and commercial banking operations. All other banks within Mainland China such as the Bank of China were either organized as divisions of the PBC[7] or were non-deposit taking agencies.[8][9]

From 1952 to 1955 government shares were added to private banks to make state-private banks, until under the first Five Year plan from 1955 to 1959 the PBOC had complete control of the private banks, making them branches of the PBOC, closely resembling the vision of Vladimir Lenin. With aid from the Soviet Union, the shares of private enterprises and with them industrial output followed a similar path, forming a Soviet-style planned economy.

With the exception of special allocations for rural development, the monolithic PBOC dominated all business transactions and credit until 1978,[10] when, as part of the Chinese economic reforms, the State Council split off the commercial banking functions of the PB into four independent but state-owned banks, including the Industrial and Commercial Bank of China (ICBC), the Bank of China (BOC), the Agricultural Bank of China (ABC), and the China Construction Bank (CCB).[11] In 1983, the State Council promulgated that the PBC would function as the central bank of China.

Chen Yuan was instrumental in modernizing the bank in the early 1990s. Its central bank status was legally confirmed on March 18, 1995 by the 3rd Plenum of the 8th National People's Congress, and was granted a high degree of independence by an act that year.[12] 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. In 2003, the Standing Committee of the Tenth 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.

Management


The top management of the PBC are composed of the governor and a certain number of deputy governors. The governor of the PBC is appointed into or removed by the National People's Congress or its Standing Committee. The candidate for the governor of the PBC is nominated by the Premier of the People's Republic of China approved by the National People's Congress. When the National People's Congress is in adjournment, the Standing Committee sanctions the candidacy for the governor of the PBC. The deputy governors of the PBC are appointed to or removed from office by the Premier of the State Council.

The PBC adopts a 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 is Yi Gang. Deputy governors of the management team include: Wang Huaqing, Pan Gongsheng, Fan Yifei, Guo Qingping, Zhang Xiaohui, and Yang Ziqiang.[13] Former top-level managers include: Ms. Hu Xiaolian, Liu Shiyu, Li Dongrong and Ms. Jin Qi.

Structure


People's Bank of China Tianjin branch, formerly the Central Bank Tientsin Branch building until 1949, now a protected heritage site

The PBC has established 9 regional branches, one each in Tianjin, Shenyang, Shanghai, Nanjing, Jinan, Wuhan, Guangzhou, Chengdu and Xi'an, 2 operations offices in Beijing and Chongqing, 303 municipal sub-branches and 1809 county-level sub-branches.

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 PBC consists of 18 functional departments (bureaus) as below:[14]

  • General Administration Department
  • Legal Affairs Department
  • Monetary Policy Department
  • Financial Market Department
  • Financial Stability Bureau
  • Financial Survey and Statistics Department
  • Accounting and Treasury Department
  • Payment System Department
  • Technology Department
  • Currency, Gold and Silver Bureau
  • State Treasury Bureau
  • International Department
  • Internal Auditing Department
  • Personnel Department
  • Research Bureau
  • Credit Information System Bureau
  • Anti-Money Laundering Bureau (Security Bureau)
  • Education Department of the CPC PBC Committee

The following enterprises and institutions are directly under the PBC:[15]

  • China Anti-Money Laundering Monitoring and Analysis Center
  • PBC Graduate School
  • China Financial Publishing House
  • Financial News
  • China National Clearing Center
  • China Banknote Printing and Minting Corporation
  • China Gold Coin Incorporation
  • China Financial Computerization Corporation
  • China Foreign Exchange Trade System

Microfinance

Financial inclusion

The PBOC is active in promoting financial inclusion policy and a member of the Alliance for Financial Inclusion.[16]

List of governors


No.NameTook officeLeft officePremierNotes
1Nan HanchenOctober 1949October 1954Zhou Enlai
2Cao JuruOctober 1954October 1964Zhou Enlai
3Hu LijiaoOctober 19641966Zhou Enlai
post abolished during Cultural Revolution
4Chen XiyuMay 1973January 1978Zhou Enlai
Hua Guofeng
5Li BaohuaJanuary 1978April 1982Hua Guofeng
Zhao Ziyang
6Lü PeijianApril 1982March 1985Zhao Ziyang
7Chen MuhuaMarch 1985April 1988Zhao ZiyangState Councilor (1982–1988)
8Li GuixianApril 1988July 1993Li PengState Councilor (1988–1998)
9Zhu RongjiJuly 1993June 1995Li PengFirst-ranked Vice-Premier (1993–1998)
10Dai XianglongJune 1995December 2002Li Peng
Zhu Rongji
11Zhou XiaochuanDecember 2002March 2018Zhu Rongji
Wen Jiabao
Li Keqiang
Vice Chairman of the CPPCC
National Committee (2013–2018)
12Yi GangMarch 2018IncumbentLi KeqiangServes under party branch secretary Guo Shuqing

Interest rates


Previously, interest rates set by the bank were always divisible by nine, instead of by 25 as in the rest of the world.[17][18] However, since the central bank began to increase rates by 0.25 percentage points on October 19, 2010, this is no longer the case.

PBC latest interest rate changes:[3]

Change dateInterest rate
August 25, 2015 4.600%
June 27, 20154.850%
May 10, 20155.100%
February 28, 20155.350%
November 21, 20145.600%
July 6, 20126.000%
June 8, 20126.310%
July 7, 20116.560%
April 6, 20116.310%
February 9, 20116.060%
December 26, 20105.810%

Reserve requirement ratio


PBC latest reserve requirement ratio (RRR) changes:

Change dateReserve requirement ratioExtra cash for financial system
December 200821.0%
December 201120.5%350 billion yuan ($55 billion)[19]
May 201220.0%400 billion yuan ($63.4 billion)[20]
February 201519.5%600 billion yuan ($96 billion)[21]
April 201518.5%1.5 trillion yuan ($240 billion)[22]
August 2015 18.0% 650 billion yuan ($101 billion)

Foreign-exchange reserves


Foreign-exchange reserves from 2004:[23][24]

Year & monthForeign-exchange reserves (US$ billion)
2004-01415.7
2004-02426.6
2004-03439.8
2004-04449
2004-05458.6
2004-06470.6
2004-07483
2004-08496.2
2004-09514.5
2004-10542.4
2004-11573.9
2004-12609.9
2005-01623.6
2005-02642.6
2005-03659.1
2005-04670.8
2005-05691
2005-06711
2005-09769
2005-12818.9
2006-01845.2
2006-02853.7
2006-03875.1
2006-04895
2006-05925
2006-06941.1
2006-07954.6
2006-08972
2006-09987.9
2006-101009.6
2006-111038.8
2006-121066.3
2007-011104.7
2007-021157.4
2007-031202
2007-041246.6
2007-051292.7
2007-061332.6
2007-071385.2
2007-081408.6
2007-091433.6
2007-101454.9
2007-111497
2007-121528.2
2008-011589.8
2008-021647.1
2008-031682.2
2008-041756.7
2008-051797
2008-061808.8
2008-071845.2
2008-081884.2
2008-091905.6
2008-101879.7
2008-111884.7
2008-121946
2009-011913.5
2009-021912.1
2009-031952.7
2009-042008.9
2009-052089.5
2009-062131.6
2009-072174.6
2009-082210.8
2009-092272.6
2009-102328.3
2009-112388.8
2009-122399.2
2010-012415.2
2010-022424.6
2010-032447.1
2010-042490.5
2010-052439.5
2010-062454.3
2010-072538.9
2010-082547.8
2010-092648.3
2010-102760.9
2010-112767.8
2010-122847.3
2011-012931.7
2011-022991.4
2011-033044.7
2011-063197.5
2011-073245.3
2011-083262.5
2011-093201.7
2011-103273.8
2011-113220.9
2011-123181.1
2012-013253.6
2012-023309.7
2012-033305
2012-043298.9
2012-053206.1
2012-063240
2012-073240
2012-083272.9
2012-093285.1
2012-103287.4
2012-113297.7
2012-123311.6
2013-013410
2013-023395.4
2013-033442.6
2013-043534.5
2013-053514.8
2013-063496.7
2013-073547.8
2013-083553
2013-093662.7
2013-103736.6
2013-113789.5
2013-123821.3
2014-013866.6
2014-023913.7
2014-033948.1
2014-043978.8
2014-053983.9
2014-063993.2
2014-073966.3
2014-083968.8
2014-093887.7
2014-103852.9
2014-113847.4
2014-123843
2015-013813.41
2015-023801.5
2015-033730.04
2015-043748.14
2015-053711.14
2015-063693.84
2015-073651.31
......
2017-053053.57
2017-063056.79
2017-073080.72
2017-083091.53
2017-093108.51
2017-103109.21
2017-113119.28
2017-123139.95
2018-013161.46
2018-023134.48
2018-033142.82

See also


References


  1. 官方储备资产. People's Bank of China. Retrieved December 9, 2017.
  2. "PBC base interest rate – Chinese central bank's interest rate", Global-rates.com. Retrieved 2018-05-19.
  3. "Global Economic Briefing: Central Bank Balance Sheets" (PDF). Yardeni.com. Retrieved December 4, 2017.
  4. James M. Zimmerman 2010. "China Law Deskbook . p. 452".
  5. Becky Chiu, Mervyn Lewis 2006. Reforming China's State-owned Enterprises and Banks. p. 203. https://books.google.com/books?id=-GTCsC6AqVUC&pg=PA203
  6. "History of Bank of China", Boc.cn, Retrieved 2015-11-23.
  7. "History", China Construction Bank webpage. Retrieved 2015-11-23.
  8. James M. Zimmerman 2010. China Law Deskbook. p.449. https://books.google.com/books?id=oDpWHVz2tO0C&pg=PA449
  9. Becky Chiu, Mervyn Lewis 2006. Reforming China's State-owned Enterprises and Banks. p.188-189. https://books.google.com/books?id=-GTCsC6AqVUC&pg=PA188
  10. James M. Zimmerman 2010. China Law Deskbook. p.450. https://books.google.com/books?id=oDpWHVz2tO0C&pg=PA450
  11. Becky Chiu, Mervyn Lewis 2006. Reforming China's State-owned Enterprises and Banks. p.203. https://books.google.com/books?id=-GTCsC6AqVUC&pg=PA203
  12. "Management Team", Pbc.gov.cn, November 23, 2015. Retrieved 2015-11-23.
  13. The People's Bank of China. "Management and Organizational Structure". Retrieved May 29, 2012.
  14. The People's Bank of China. "Enterprises and Institutions directly under the PBC". Retrieved May 29, 2012.
  15. "AFI members". AFI Global. October 10, 2011. Archived from the original on February 20, 2012. Retrieved February 23, 2012.
  16. "Calendar, Abacus Help Determine Size of Chinese Rate Increases". Bloomberg. May 18, 2007.
  17. "Viewpoint: The "divisible by nine" rule". Info.gov.hk. Retrieved December 4, 2017.
  18. "China's Reserve-Ratio Cut May Signal Economic Slowdown Deepening". Bloomberg.com. November 30, 2011. Retrieved December 4, 2017.
  19. "China Lowers Banks' Reserve Requirements to Support Growth". Bloomberg.com. May 12, 2012. Retrieved December 4, 2017.
  20. Wei, Lingling (February 5, 2015). "China Cuts Reserve Requirement Ratio". Wsj.com. Retrieved December 4, 2017.
  21. "Economists React: China's Aggressive Cut in Banks' Reserve Requirement Ratio". Blogs.wsj.com. April 20, 2015. Retrieved December 4, 2017.
  22. "China Monthly Foreign Exchange Reserves Analysis – CNGFOREX". Bloomberg.com. Retrieved December 4, 2017.
  23. "Archived copy". Archived from the original on August 12, 2015. Retrieved August 12, 2015.CS1 maint: archived copy as title (link)

Further reading


  • Stephen Bell and Hui Feng. The Rise of the People's Bank of China: The Politics of Institutional Change (Harvard University Press; 2013) 384 pages; Recent history; uses interviews with key figures