People's Bank of China (PBoC)

The People's Bank of China (PBoC) is the central bank of the People's Republic of China. It formulates and implements monetary policy, issues the renminbi, oversees the national payment and clearing system, manages foreign exchange reserves and works to maintain financial stability. Unlike many central banks, it operates under the State Council rather than as a legally independent institution, and major policy decisions are taken within the government's broader economic framework.

The PBoC is headquartered in Beijing. Its governor since 2023 has been Pan Gongsheng. Through its oversight of payment infrastructure, foreign exchange administration and the digital renminbi, it plays a central role in how money moves into, out of and within China. For an overview of its structure and mandate, see the People's Bank of China regulator profile.

The bank was founded on 1 December 1948, shortly before the establishment of the People's Republic, through the merger of several banks operating in areas controlled by the Communist Party. For decades it functioned as both central bank and the main commercial bank under a planned economy. In 1983 the State Council decided that it should function exclusively as a central bank, with commercial activity transferred to state-owned banks, and the Law of the People's Republic of China on the People's Bank of China, adopted in 1995, gave this role a statutory basis. Banking supervision was later moved to separate regulators, now the National Financial Regulatory Administration, while the PBoC retained responsibility for macroprudential policy and systemic risk.

The PBoC's stated objective is to maintain the stability of the value of the currency and thereby promote economic growth. Its tools include:

• the reserve requirement ratio, adjusted more actively than in most major economies;
• open market operations, especially short-term reverse repurchase agreements, which have become its main policy rate signal;
• lending facilities such as the medium-term lending facility;
• guidance on the loan prime rate, the benchmark for bank lending rates;
• window guidance and targeted lending programs.

The PBoC also manages the exchange rate of the onshore renminbi through a daily central parity fixing and a trading band, and intervenes through state banks when needed. More background on the role of central banks generally is in the entry on monetary policy.

The PBoC operates the China National Advanced Payment System, including its large-value real-time settlement component, and oversees retail clearing. It licenses and supervises non-bank payment institutions, including the large mobile wallet operators, and in 2018 required their online transactions with banks to clear through a central platform. It sponsored the Cross-Border Interbank Payment System (CIPS), launched in 2015 for renminbi payments across borders. The PBoC has also developed the e-CNY (digital renminbi), one of the most advanced retail central bank digital currency projects, piloted in multiple cities from 2020.

The State Administration of Foreign Exchange (SAFE), which administers China's capital controls and manages much of its reserves, operates under the PBoC. Since 2009 the PBoC has supported cross-border RMB settlement for trade, appointed an RMB clearing bank in many financial centers and signed bilateral central bank swap lines with dozens of counterparts. These steps fostered an offshore RMB market, traded as CNH, alongside the more tightly controlled onshore RMB (CNY); the CNY-CNH spread between the two is watched as a gauge of capital flow pressure. In 2016 the renminbi joined the IMF's Special Drawing Rights basket.

• People's Bank of China