State Council
Appoints New Monetary Policy Committee
The State
Council has recently appointed new members into the Monetary Policy Committee.
The Committee is now chaired by Mr. Zhou Xiaochuan, Governor of the People's
Bank of China and comprises 12 other members. They are Mr. You Quan, Deputy
Secretary-General of the State Council, Mr. Zhu Zhixin, Vice Minister of the
State Development and Reform Commission, Mr. Jin Liqun, Vice Finance Minister,
Madam Wu Xiaoling, Deputy Governor of the People's Bank of China, Mr. Li Ruogu,
Deputy Governor of the People's Bank of China, Mr. Li Deshui, Commissioner of
the National Bureau of Statistics, Mr. Guo Shuqing, Administrator of the State
Administration of Foreign Exchange, Mr. Liu Mingkang, Chairman of the China Banking
Regulatory Commission, Mr. Shang Fulin, Chairman of the China Securities
Regulatory Commission, Mr. Wu Dingfu, Chairman of the China Insurance
Regulatory Commission, Mr. Xiao Gang, Chairman of China Association of Banks
and President of Bank of China, and Mr. Li Yang, Director of Institute of
Financial Research, China Academy of Social Sciences.
The Monetary Policy Committee was
originally established in July 1997 upon approval of the State Council.
According to the Regulations on Monetary
policy Committee of the People's Bank of China issued by the State Council,
the Committee's major responsibility was to discuss and advise on important
issues related to monetary policy based on macroeconomic targets set by the
government. These issues include formulation and adjustment of monetary policy,
policy targets setting for a certain period of time, application of policy
instruments, major policy measures to be taken and coordination between
monetary policy and other macroeconomic policies.
The Committee
plays its advisory role through regular meetings of its members. Between July
1997 and January 2003, the Monetary Policy Committee altogether held 21 regular
meetings in which members had extensive discussions on important policy issues
like money supply, interest rate, exchange rate, open market operations,
required reserves, rediscount as well as coordination between monetary policy
and other macroeconomic policies. After each regular meeting, the Committee
issues a press release in which main contents of discussion are disclosed and
the future stance of monetary policy is indicated as well. The creation and
functioning of the Monetary Policy Committee is called for by development of
the socialist market economic system in China, and it is an institutional innovation
combining domestic and international experiences to strengthen macroeconomic
management in China. Such an arrangement has greatly contributed to fostering
formulation and implementation of the monetary policy in a scientific and
transparent way.
In accordance
with the reshuffle plan of the State Council adopted by the 1st
Plenary Session of the 10th National People's Congress, the People's
Bank of China will strengthen functions in formulating and implementing
monetary policy so that the central bank could play a more significant role in
macroeconomic management. The composition of the new Monetary Policy Committee
reflects such a consideration with its membership broadened to include a Deputy
Secretary-General in charge of financial affairs in the Sate Council and the
Chairman of the newly established China Banking Regulatory Commission.
Moreover, the China Association of Banks is selected instead of a wholly
State-owned commercial bank as the representative institution of the banking
industry in the Monetary Policy Committee, aiming at comprehensively reflecting
views of the banking sector in the making and implementation of monetary
policy. With such a change in its membership, the Monetary Policy Committee now
is more representative of various economic sectors, which is conducive to
improving its advisory role, fostering coordination between monetary policy and
other macroeconomic policies and encouraging responses from different sectors
on the making of monetary policy.
