The People's Bank of China (officially PBC[3] and unofficially PBOC[4]) is the central bank of the People's Republic of China. It is responsible for carrying out monetary policy as determined by the PRC People's Bank Law and the PRC Commercial Bank Law.
The PBC was established in 1948 as the bank serving areas of mainland China under Chinese Communist Party (CCP) control and became China's sole central bank after the founding of the People's Republic of China in 1949. From 1969 to 1978, the PBC was demoted to a bureau of the Ministry 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 in financial supervision.
The PBC is the 25th-ranked of 26 ministerial-level departments of the State Council.[5] The PBC lacks central bank independence and is required to implement the policies of the CCP under the direction of the party's Central Financial Commission. The PBC is led by a governor assisted by several deputy governors and a CCP Committee Secretary. Since 2023, the roles of governor and CCP Committee Secretary have been held jointly by Pan Gongsheng.[6]
History
Mao era
The bank was established on 1948-12-1 by merger of three of several regional CCP-run financial entities, respectively the Huabei Bank (華北銀行, active in North China), Beihai Bank (in Shandong), and Xibei Farmers Bank (in Northwestern China).[7] The new bank was first headquartered at the former Huabei Bank head office in Shijiazhuang, 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's single-tier banking system and was responsible for all central banking and commercial banking operations.[8] All other banks within mainland China such as the Bank of China were either organized as divisions of the PBC,[9] or were non-deposit-taking agencies.[10]
Operations
The PBC is a cabinet-level executive department of the State Council.[15] The top management of the PBC are composed of the governor and a certain number of deputy governors. The governor is nominated by the premier of the State Council, who is then approved by the National People's Congress or its Standing Committee and appointed by the president.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 is Pan Gongsheng. Deputy governors of the management team include: Zhu Hexin, Zhang Qingsong, Xuan Changneng, Lu Lei, and Tao Ling.[28] The PBC does not have central bank independence and is required to implement the policies of the Chinese Communist Party (CCP).[29]
Role in green finance
Since the early 2000s, the PBOC has progressively integrated sustainability into its prudential and monetary policy framework, steering green 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 the Network for Greening the Financial System (NGFS), which was launched in 2017.
Policy instruments
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.
See also
- Internationalization of the renminbi
- List of central banks
- History of banking in China
External links
References
- Total reserves (includes gold, current US$) - China data.worldbank.org, retrieved 7 August 2023^
- China Unleashes Stimulus Package to Revive Economy, Markets Bloomberg News, 24 September 2024, retrieved 24 September 2024^
- Home > About PBC People's Bank of China, retrieved 2022-05-31