Chinese People's Bank
| Headquarters |
Beijing , PR China
|
| founding | December 1, 1948 |
| president |
Yi Gang 易 纲 |
| country | People's Republic of China |
| currency | |
| Currency reserves | US $ 3.096 trillion (November 2019) |
| Base loan rate | 6.00% |
| Website | |
| predecessor | |
| List of central banks | |
The Chinese People's Bank , ( Chinese 中國人民銀行 / 中国人民银行 , Pinyin Zhōngguó Rénmín Yínháng ; short 人 行 , Rénháng , English People's Bank of China , short PBC , PBOC ), is the central bank of the People's Republic of China and is responsible for monetary and currency policy for the Chinese currency renminbi . It was founded in Shijiazhuang on December 1, 1948 and has had its headquarters in Beijing since 1949 . In the first 30 years of its existence, the institution assumed the role of a commercial and central bank, whereby it was merely an executive state organ. In the course of a lengthy process of transformation, the PBoC changed into an institution that concentrates entirely on traditional central bank tasks, while still reporting to the State Council .
history
founding
The People's Bank was before the proclamation of the People's Republic of China on 1. December 1948 by the merger of three regional central banks Huabei Bank , Beihai Bank and Xibei Farmer Bank founded. Just like its predecessors, it largely finances the communists' war against the national Guomindang government . The founding seat was in Shijiazhuang ( Hebei ).
Pre-reform period (1949 to 1978)
In 1949, the Communist Party, which pursued a nationalization and centralization strategy in the banking sector, took power in China. That year, the headquarters of the PBoC were relocated to Beijing , where their headquarters are to this day. The foreign banks were so restricted in their room for maneuver that they gradually emigrated. The central bank and other state banks as well as private financial institutions were broken up and incorporated into the organizational structure of the PBoC. Markets for stocks, bonds and other financial derivatives were closed. The result of this centralization was a banking system based on the Soviet model in which there was only one bank. In this mono-banking system , the PBoC took over both the functions of a central bank and a commercial bank , as was customary in central administration economies .
Institutional classification of the PBoC during the pre-reform period
The PBoC was at times just a department of the Ministry of Finance or a ministry itself, which, like all other ministries, was subordinate to the State Council. The PBoC was thus an executive state organ that was bound by government goals and plans in the exercise of its activities.
In addition to the PBoC, there were two other state institutions that are still part of the Chinese banking system today. The Bank of China (BOC) was responsible for transferring funds abroad and was under the direction and control of the PBoC. Her tasks included the processing of foreign trade finance and international payments as well as the execution of foreign exchange transactions . The People's Construction Bank of China (PCBC) was responsible for infrastructure projects and was a body of the Treasury. Her responsibilities included overseeing construction projects, reviewing the budget, and ensuring that funds were being used in accordance with government investment plans.
Tasks of the PBoC during the pre-reform period
During its early institutional phase, the PBoC was responsible for the production and issuance of banknotes and coins, for managing the supply of money and controlling the circulation of banknotes and coins, for granting loans to other (state) economic entities, for setting up an electronic payment system, responsible for the nationwide foreign exchange control, for the setting of savings and lending rates, for the administration of currency reserves and for the administration of the accounts of the Treasury.
Reforms from 1979
In the course of the macroeconomic reform and opening-up policy, China has been restructuring and expanding its banking system considerably since 1979 in a lengthy transformation process of more than 20 years. The aim was to decentralize the financial sector.
1979 to 1993
The eleventh congress of the Communist Party of China from December 18-22, 1978 marks a turning point in China's economic development. On the one hand, markets should lead to a more efficient use of resources in order to increase overall economic production and the standard of living of the population. Second, as a result of its opening policy in 1980 , China became a member of the International Monetary Fund and the World Bank . Along with these developments, it was necessary to create a banking system that would support the People's Republic of China in this development process. The mono-banking system that had existed until then was unsuitable for this support, so diversification in the Chinese banking system had to take place. During the first reform period, the commercial banking functions of the PBoC were divided between the following four independent but state-owned institutions:
- Agricultural Bank of China (ABoC)
- Bank of China (BoC)
- People's Construction Bank of China (PCBoC)
- Industrial and Commercial Bank of China (ICBoC) .
With this, the PBoC completely lost its commercial banking functions and from now on was entrusted exclusively with the tasks of a central bank. Her main tasks were now on monetary policy and financial supervision . The previous mono-banking system was thus abolished and the construction of a two-tier banking system heralded. The PBoC, however, was still directly subordinate to the State Council, that is, it remained a government agency whose primary task was to implement the credit plans determined by industrial policy. In addition, other commercial banks were set up that were not owned by the central government. With them the previous state banking monopoly in the People's Republic of China has been broken and a certain amount of banking competition has developed. However, this attempt at the intended separation of central bank and commercial bank functions failed due to personal ties and conflicts of interests.
1994 to 1997
A second attempt to separate the central bank and commercial bank functions and thus a temporary end to structural changes in the PBoC were the reforms of the banking system from 1994 onwards. The Central Bank Act (ZBG), which came into force in 1995, is based on elements of the American Federal Reserve Bank system falls back, for the first time explicitly defined the monetary policy authority of the PBoC as the central bank. According to this law, the PBoC should not be affected in its decisions by local governments, administrations or individuals. This legal basis officially and bindingly assigns the PBoC an exposed position within the Chinese banking system and sets a significant example regarding the importance of the PBoC. At the same time, the ZBG explicitly prohibits the PBoC from financing budget deficits and lending to organizations of central and local governments. The aim of the reforms of the 1990s is therefore to reduce the influence of various political authorities on the central bank.
From 1997
Against the background of the Asian crisis , a new phase in the transformation of the Chinese banking system was initiated at the end of 1997. The authority and independence of the PBoC were further strengthened and, as a result, the supervision and control of the banks was strengthened. In order to increase the effectiveness of bank supervision by the PBoC and its credit policy, the organizational structure of the PBoC was changed. The previous 31 branches of the PBoC at the provincial level have now been reduced to 9 branches. These newly founded branches are now responsible for a larger area in which provincial borders are crossed. The new organizational structure should prevent the interference of local governments and so-called provincial princes in the activities of the PBoC and the implementation of their central bank policy should be implemented more effectively.
The experience of the Asian crisis made it clear how important a functioning monitoring system is for the stability of the entire financial sector. In order to achieve a clear separation between monetary tasks and supervisory tasks, the PBoC was increasingly relieved of its supervisory tasks from 1998. In 1998, the oversight of insurance companies was transferred to the China Insurance Regulatory Commission (CIRC) and the oversight of securities companies to the China Securities Regulatory Commission (CSRC) . In the spring of 2003, the central bank was completely relieved of its supervisory tasks by transferring the supervisory authority for credit institutions to the China Banking Regulatory Commission (CBRC) and can now concentrate entirely on its monetary function. Like the PBoC, the three supervisory authorities report directly to the State Council of the People's Republic of China .
As a result of the reforms, a new Chinese banking system has emerged, which has changed fundamentally compared to the pre-reform period. Instead of a mono-banking system, a diverse banking landscape has developed in which political and commercial banking is separated. Under the umbrella of the PBoC and under the control of various supervisory authorities, special state institutions (so-called policy banks), state-run commercial banks (so-called Big Four), commercial banks operating nationwide as corporations (so-called national commercial banks), credit unions, foreign banks act and complement each other and urban banks, which have arisen from urban credit cooperations and whose business activities are mainly focused on cities (so-called city banks).
Despite its often emphasized independence in relation to local governments, administrations or individuals, the PBoC is still subject to the instructions of the State Council. Chapter I, Article 2 ZBG states: "The People's Bank of China shall, under the leadership of the State Council, formulate and implement monetary stability [...]." . The PBoC is thus a department of the State Council and is thus on the same level as the Ministry of Finance.
Structure of the PBoC
Top management
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The high influence of the State Council on the PBoC is reflected in its organizational structure, which is regulated in Chapter II of the ZBG. Accordingly, the PBoC is headed by its governor, who is proposed by the chairman of the State Council and appointed by the National People's Congress . In addition to the central bank chairman, who has general responsibility for the work of the central bank, there are various deputy central bank chairmen who support the governor in his work. The deputies are appointed and recalled by the chairman of the State Council (Chapter II, Art. 10 and 11 ZBG). The PBoC also has to establish a monetary policy committee whose tasks and working procedures are prescribed by the State Council and which are to be put on record to the standing committee of the national people's assembly (Chapter II, Art. 12 ZBG).
The top management of the PBoC currently consists of 9 members.
| Surname | function |
|---|---|
| Yi gang | Central Bank Chairman |
| Hu Xiaolian | Central Bank Deputy Chairwoman |
| Liu Shiyu | Deputy Central Bank Chairman |
| Yi gang | Deputy Central Bank Chairman |
| Wang Huaqing | Head of the disciplinary department |
| Pan Gongsheng | Deputy Central Bank Chairman |
| Li Dongrong | Deputy Central Bank Chairman |
| Guo Qingping | Assistant to the Central Bank Chairman |
| Jin Qi | Assistant to the Central Bank Chairman |
| Term of office | Surname |
|---|---|
| 10.1949-10.1954 | Nan HanChen |
| 11.1954-10.10.1964 | Cao Ju Ru |
| 10.1964-1966 | Hu Lijiao |
| 05.1973-01.1978 | Chen Xiyu |
| 05.1978-05.1982 | Li Baohua |
| 05.1982-03.1985 | Lu Peijian |
| 03.1985-04.1988 | Chen Muhua |
| 04.1988-07.1993 | Li Guixian |
| 07.1993-06.1995 | Zhu Rongji |
| 06.1995-12.2002 | Dai Xianglong |
| 01.2003-03.2018 | Zhou Xiaochuan |
| From 03.2018 | Yi gang |
Departments
The bank's head office, which consists of two main offices in Beijing and Shanghai, is divided into the departments of General Administration, Legal Affairs, Monetary Policy, Financial Markets, Financial Stability, Financial Supervision and Statistics, Accounting, Payment Systems, Technology, Currency, Treasury, International Affairs, Internal Audit, Human Resources, Internal audit, credit information system, anti-money laundering, education and training and foreign exchange.
Regional representatives
Since the restructuring in 1998, the substructure of the PBoC has been divided into nine regional branches, whose areas of responsibility do not completely coincide with the administrative boundaries. The regional and inter-provincial central bank branches are located in Tianjin, Shanghai, Shenyang, Nanjing, Jinan, Wuhan, Guangzhou, Chengdu and Xian. The PBoC also includes the national coin and banknote press, the clearing center, the China Foreign Exchange Trading Center and representative offices at the main international financial centers.
PBoC governors
There have been 11 governors in the history of the PBoC.
tasks
The objectives of the PBoC are defined in the Central Bank Act passed in 1995. It says in Chapter I, Article 3: "The aim of monetary policies shall be to maintain the stabillity of the value of the currency and thereby promote economic growth." . The PBoC therefore has the primary goal of maintaining monetary stability and the secondary goal of promoting economic growth.
The tasks of the PBoC include in detail:
- Design and implementation of monetary policy (Chapter I, Art. 4, Paragraph 2 ZBG)
- Issuance of the Chinese currency, the yuan Renminbi , as well as the control of the Renminbi in circulation (Chapter I, Art. 4, Paragraph 3 ZBG)
- Determination of the exchange rate of the Renminbi against other currencies (Chapter I, Art. 4, Paragraph 5 ZBG)
- Safekeeping and administration of the state foreign currency and gold reserves (Chapter I, Art. 4, Paragraph 6 ZBG)
- Administration of public finances, issuance of government bonds on behalf of the Ministry of Finance (Chapter I, Art. 4, Paragraph 8 ZBG)
- Responsibility for statistics, studies, analyzes and forecasts of the banking sector (Chapter I, Art. 4, Paragraph 11 ZBG)
- Other functions in accordance with the State Council (Chapter I, Art. 4, Paragraph 13 ZBG)
Implementation of monetary policy
In accordance with the Central Bank Law of 1995, the PBoC uses a toolkit for carrying out monetary policy , which enables the PBoC to react flexibly to economic developments in China. Therefore, the instruments available to the PBoC are formulated as generally as possible in the ZBG. Chapter IV, Article 23 ZBG explicitly states that the PBoC has the right to further specify the instruments. The Central Bank Act makes it clear that the reform movement follows the market economy orientation.
The PBoC uses the following instruments to conduct monetary policy:
- Minimum reserve requirements (Chapter IV, Art. 23, Paragraph 1 ZBG)
- Key interest rates and interest rate specifications (Chapter IV, Art. 23, Paragraph 2 ZBG)
- Rediscount transactions (Chapter IV, Art. 23, Paragraph 3 ZBG)
- Lending to commercial banks (Chapter IV, Art. 23, Paragraph 4 ZBG)
- Open market transactions (Chapter IV, Art. 23, Paragraph 5 ZBG)
Establishing the exchange rate of the renminbi
Until the beginning of 2005, the exchange rate of the renminbi was pegged to the US dollar . This link was lifted in July 2005. Since then, the renminbi exchange rate has been based on a currency basket that includes the euro , the Japanese yen and the South Korean won in addition to the US dollar . The range within which the renminbi exchange rate is now allowed to fluctuate around the US dollar is ± 0.5%. As a result, there is still a peg to the US dollar, albeit more flexible. The current exchange rate of the renminbi against the US dollar is 6.861016 yuan (the renminbi is the Chinese currency, the unit of the renminbi is the yuan).
International role
Criticism has been raised from the international side that the renminbi exchange rate is undervalued against the US dollar and that China serves to promote its export economy . The PBoC assumes that the renminbi is being kept artificially low in order to give China a competitive advantage in the export business - China's most important economic driver. According to estimates by the World Bank , China's GDP will grow by 8.4% in 2009 compared to the previous year. Along with such economic growth, China's currency would have to be significantly revalued. But China is staying the course further down to boost its export economy. Pressure on the PBoC to hike the renminbi continues to grow. The PBoC is currently still able to withstand this pressure and is speaking of a "stable yuan". An appreciation is not expected before the second half of 2010.
Furthermore, thanks to its economic boom and strong export performance, China has accumulated the largest currency reserves in the world in recent years . Since Chinese companies earn large amounts of US dollars with their exports , the Chinese central bank exchanges them for renminbi and invests the US dollars they collect in US government bonds . In order to maintain the government's desired exchange rate to the US dollar, the Chinese central bank must constantly intervene in the foreign exchange market by selling yuan and buying US dollars in order to balance the dollar supply and the yuan demand. As of July 2009, China has foreign exchange reserves of 2.13 trillion. US dollars accumulated. These include US Treasuries worth $ 763.5 billion (as of June 2009). This makes China the USA's largest creditor. If China were to sell US government bonds on a massive scale, this would lead to a sharp fall in the price of US government bonds. This would also have a negative impact on the US dollar, which could severely depreciate the value of China's foreign exchange holdings. China and the USA are therefore mutually dependent, with America dependent on China's foreign exchange policy and China on the rate of the US dollar. Furthermore, government circles in Beijing are already talking about a dollar trap . The meanwhile huge Chinese foreign exchange holdings in US dollars and a currently ailing US dollar are causing concern for China's officials. Concerned about the security of its currency reserves, the Chinese government is demanding a stable US dollar and is therefore interested in supporting the economy of the United States.
literature
- Daiwei Huang: The Chinese banking sector under the sign of WTO accession. Reports of the China Research Division No. 17, October 2002.
- Stefan Brehm: The integration of the People's Republic of China into a global financial and currency order. LIT Verlag, Tübingen 2007, ISBN 978-3-8258-9614-0
Web links
- Official website (Chinese, English)
- China Internet Information Center 2005 - Reforming the Financial System (People's Bank of China)
Individual evidence
- ↑ China Foreign Exchange Reserves . tradingeconomics.com. Accessed on January 28, 2017 (English)
- ^ History of the PBoC . Retrieved December 9, 2009.
- ↑ Xiumin Chen: Problem loans and the Chinese banking reform in view of asymmetrical information and institutional incentives. Dissertation, Frankfurt am Main 2005, pp. 15-16.
- ↑ Daiwei Huang: The Chinese banking sector under the sign of WTO accession. Reports of the Research Unit on China Research No. 17, October 2002, p. 5.
- ↑ Daiwei Huang: The Chinese banking sector under the sign of WTO accession. Reports of the Research Unit on China Research No. 17, October 2002, pp. 4–5.
- ↑ Daiwei Huang: The Chinese banking sector under the sign of WTO accession. Reports of the Research Unit on China Research No. 17, October 2002, p. 7.
- ↑ Xiumin Chen: Problem loans and the Chinese banking reform in view of asymmetrical information and institutional incentives. Dissertation, Frankfurt am Main 2005, pp. 41, 42
- ↑ Stefan Brehm: The integration of the People's Republic of China into a global financial and currency order. LIT Verlag, Tübingen 2007, pp. 34–36.
- ↑ Daiwei Huang: The Chinese banking sector under the sign of WTO accession. Reports of the China Research Division No. 17, October 2002, pp. 8–9.
- ↑ Daiwei Huang: The Chinese banking sector under the sign of WTO accession. Reports of the China Research Division No. 17, October 2002, pp. 11–12.
- ^ A b Maximilian JB Hall: The international Handbook on Financial Reform. Edward Elgar Publishing Limited, Cheltenham 2003, p. 75.
- ↑ Xiumin Chen: Problem loans and the Chinese banking reform in view of asymmetrical information and institutional incentives. Dissertation, Frankfurt am Main 2005, p. 48.
- ↑ Xiumin Chen: Problem loans and the Chinese banking reform in view of asymmetrical information and institutional incentives. Dissertation, Frankfurt am Main 2005, p. 52 f.
- ^ A b c Law of the People's Republic of China on the People's Bank of China . Retrieved November 22, 2009.
- ↑ Management team of the PBoC . Retrieved August 13, 2012.
- ↑ Chen Muhua , in: Internationales Biographisches Archiv 47/1988 of November 14, 1988, in the Munzinger Archive ( beginning of the article freely available)
- ↑ Departments of the PBoC . Retrieved November 24, 2009.
- ↑ Governors of the PBoC . Retrieved November 24, 2009.
- ↑ Lower yuan promotes blistering . In: FAZ , November 13, 2009. Retrieved November 27, 2009.
- ↑ China's currency reserves rise to $ 2.13 trillion . Retrieved November 27, 2009.
- ↑ China will probably not sell US government bonds for the time being . Retrieved November 27, 2009.
- ↑ China suffers from dollar dilemma . Retrieved November 27, 2009.
