Xiang Junbo: The establishment of the PBC Shanghai Head Office
Speech by Mr Xiang Junbo, Deputy Governor of the People's Bank of China, at the inauguration
ceremony of the People's Bank of China Shanghai Head Office, Shanghai, 10 August 2005.
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Honorable General Secretary Chen,
Honorable Mayor Han,
Dear guests,
Ladies and Gentlemen,
Today, we are here to celebrate the inauguration ceremony of the People's Bank of China Shanghai
Head Office. The setup of the PBC Shanghai Head Office is an important decision made by the CPC
Central Committee and the State Council to further improve our central bank system in the new
situation, an important institutional arrangement to enhance the role of the central bank in
macroeconomic management, and also a significant initiative facilitating the building of Shanghai into an
international financial center. Now let me, on behalf of the People's Bank of China, express our
sincere gratitude to all departments of the CPC Central Committee, the State Council, the CPC
Shanghai Committee, Shanghai Municipal Government and various social circles for your support in
preparing the establishment of the PBC Shanghai Head Office.
Since China adopted the reform and opening-up policy, and with the gradual improvement of the
socialist market economy, the central bank system in China has been constantly improved. In 1984,
the State Council decided to have the PBC function as a central bank. The Law of the People's
Republic of China on the People's Bank of China passed by the Third Plenum of the Eighth National
People's Congress in 1995 legally confirmed the PBC's central bank status. In 1998, the CPC Central
Committee and the State Council decided to reform the administrative system of the central bank by
dismantling provincial branches and setting up regional branches, which further strengthened
independence of the central bank. As an integral part of the PBC Head Office, the Shanghai Head
Office will operate under the guidance and authorization of the PBC Head Office in Beijing. Its major
responsibilities include part of the central bank operational functions and some of the administrative
functions.
The establishment of the PBC Shanghai Head Office will help the central bank to further improve its
decision-making and operational system, and strengthen its macroeconomic management capacity.
Since China's accession to the WTO, China's opening to the outside world has escalated and the
economy has become increasingly market-oriented. The consequent profound changes occurring in
the financial industry have given rise to higher uncertainties in the economic and financial
development, posing new challenges to the central bank's macro-economic capability. By shifting part
of its operational functions to the PBC Shanghai Head Office and leaving the Head Office in Beijing
with decision-making and policy formulation responsibilities, we can take advantage of the human
resources in Shanghai to build a team of experts good at central bank operations, financial market
analysis and financial products development, and form scientific and rational labor division in terms of
policy decision procedure and administrative methods, so as to further strengthen the professional
capacity of the central bank in macro-economic management.
The establishment of PBC Shanghai Head Office will enable the PBC to take advantage of the direct
access to financial markets to improve the role of the central bank in macro-economic management
and financial services, particularly efficiency of financial market services. At present, the nation-wide
unified inter-bank market, bond market, foreign exchange market as well as the gold market, futures
market and Shanghai Stock Exchange are all located in Shanghai. These markets not only form the
most important markets where financial institutions, enterprises and households manage financial
assets and make investment, but also serve as the platform for the central bank to conduct market
operations and implementing macro-economic management policies. Setup of the PBC Shanghai
Head Office will enable the PBC to obtain first-hand information on market development and give
feedback directly, accurately grasp the pulse of market development and conduct monetary operations
and take fine-tuning measures in a timely and effective manner, so as to enhance the efficiency of
macro-economic management and financial services.
Establishment of the PBC Shanghai Head Office will expand the influence of Shanghai as a financial
market and speed up the building of Shanghai as an international financial center, which is an
important strategic decision made by the CPC Central Committee and the State Council from the
overall viewpoint of advancing China's socialist modernization process. In the early 1990s, Mr. Deng
Xiaoping said that China had to depend on the development of Shanghai to enhance the international
competitiveness of its financial industry. In his visit to Shanghai in July 2004, President Hu Jintao
called for continued efforts to make Shanghai an international center for global economic, financial,
trade and marine transportation activities. International experiences show that the setup of central
bank headquarters goes hand in hand with development of international financial centers. The
opening of PBC Shanghai Head Office will facilitate financial innovation and financial market
development, give impetus to the development of commercial financial institutions, and enhance the
influence of Shanghai as an international financial center on domestic financial sector and the financial
development in the Asian-Pacific region.
The CPC Shanghai Committee, Shanghai Municipal Government, financial regulatory institutions in
Shanghai, and policy and commercial financial institutions have always supported the PBC in carrying
out its work, which guaranteed the effective operation of the institutions of the PBC in Shanghai. The
newly founded PBC Shanghai Head Office will also need attention and support from all of you. By
making continued efforts to improve financial services, the PBC will seek to make new contributions to
economic development and financial stability.
Thank you!