yi gang : deepen reform and opening - up comprehensively. create new prospects for financial sector speech by mr yi gang, governor of the people's bank of china, to commemorate the 40th anniversary of china's economic reform and the 70th anniversary of the people's bank of china ( pbc ), beijing, 17 december 2018. * * * this year marks the 40th anniversary of the reform and opening - up and the 70th anniversary of the founding of the people ’ s bank of china ( pbc ). as components of china ’ s tremendous achievements in the progress of the reform and opening - up, historic changes in the financial sector have taken place in the past four decades, and a modern financial market system has been broadly established which, adapting to the socialist market economy with chinese characteristics, is vital and internationally competitive. and over the past 70 years, under the leadership of the communist party of china ( cpc ), the pbc has made extensive exploration and innovation, overcome formidable obstacles, pioneered in the promotion of financial development, reform and opening - up at different times, kept creating new prospects for the financial sector, and made significant contributions to china ’ s economic and social development. financial adjustment and macro prudential management framework gradually improved the monetary policy framework has been established and improved. after the founding of new china, the country adopted a mono - bank system compatible with the planned economy, wherein the pbc functioned as a central bank and a unique commercial bank as well. following the introduction of the reform and opening - up policy, the pbc gradually split off its industrial and commercial credit and savings businesses, and exclusively performed the functions of a central bank since 1983, with primary responsibility lying in the implementation of macro financial policies. amid the steady progress in reform and opening - up and the transition from the planned economy to the socialist market economy with chinese characteristics, the monetary policy regulatory mechanism was gradually shifted from direct adjustment - oriented to indirect adjustment - oriented. first, the law of the prc on the people ’ s bank of china specified that the ultimate objective of monetary policy is “ to maintain the stability of the value of the currency and thereby promote economic growth ”. second, measures were taken to reform the credit plan management system which featured “ centralized management on deposits and loans ”, eliminate caps on credit scales, gradually establish the m2 money supply as the intermediate target of monetary policy, and develop in due time indicator of aggregate financing to the real economy ( afre ) as an important

system for rmb internationalization. as china experienced greater economic growth and an elevating international status of rmb, a growing chorus of international voices appeared, calling for rmb ’ s inclusion into the special drawing rights ( sdr ) currency basket. since the imf reviews the sdr basket of currencies every five years, the 2015 review offered a historic opportunity for rmb to be included into sdr basket. under the strategic guidance of the cpc central committee, the pbc proactively fostered the inclusion process. on november 30, 2015, the executive board of the imf acknowledged rmb as a freely usable currency and decided that it will be included in the sdr currency basket, effective october 1, 2016. it was an important milestone in rmb internationalization, which reflected that the achievements of china ’ s reform and opening up were highly recognized by the international community. according to the swift data, rmb ranked fifth worldwide as a global currency of payment at the end of august 2018, accounting for 2. 12 % of the global market. in q2 of 2018, rmb reserves held by countries that report to the imf ’ s currency composition of official foreign exchange reserves ( cofer ) system stood at usd 193. 38 billion. over 60 foreign central banks and monetary authorities have included rmb in their official fx reserves. opening up of the financial sector steadily expanded the financial sector has been further opened up. in the early days of china ’ s reform and opening up, foreign banks were allowed to be established only in the special economic zones ( sezs ). they mainly offered services to three types of foreign - funded enterprises with credit funds basically coming from overseas. after deng xiaoping ’ s southern inspection tour talks in 1992, more openings were extended to foreign banks by removing geographical restrictions for setting up institutions and by allowing foreign banks to conduct pilot operations of rmb business in shanghai. since the accession to the wto, china has been constantly expanding the opening of the financial sector in aspects of the establishment of financial institutions, the business scope and foreign ownership. as a result, a number of foreign financial institutions set up operations in china, which formed a financial service network with certain coverage and market depth. foreign strategic investors were also invited to participate in the transformation of large state - owned commercial banks into joint - stock companies. since 2018, the pbc has resolutely implemented major state policies announced by general secretary xi jinping at the bo