People's Bank of China: History, Current Operations and Future Outlook

Abstract

We provide a comprehensive review of the development and activities of the People’s Bank of China over the half century. First, the PBC has evolved from the mixture of a central bank and a commercial bank to the central bank of China, with the status legally confirmed in 1995. Although the mandates of the PBC have altered slightly over the past decades, the monetary policy has continuously met challenges in different stages of economic development. Second, in order to reach the objectives of economic growth and stable prices, the PBC does not operate in a single instrument environment, but employs a variety of policy instruments including price-based, quantity-based and administrative policy measures. Third, the PBC has been promoting financial reforms actively and playing a key role of regulation during special episodes such as the credit crunches in 2013, which has led to the rapid development of financial systems and may further contribute to the economic growth and help balance the growth in different economic sectors.