Law of the People's Republic of China on the People's Bank of China (Amended in 2003)

Law of the People's Republic of China on the People's Bank of China (Amended in 2003)

Order of the President [2003] No.12

December 27, 2003

(Adopted at the Third Session of the Eighth National People's Congress on March 18, 1995, and amended based on the Decision on Revising the Law of the People's Republic of China on the People's Bank of China adopted at the Sixth Session of the Standing Committee of the Tenth National People's Congress on December 27, 2003)

Contents
Chapter I General Provisions
Chapter II Organizational Structure
Chapter III The Renminbi
Chapter IV Business Operations
Chapter V Financial Supervision and Control
Chapter VI Financial Affairs and Accounting
Chapter VII Legal Responsibility
Chapter VIII Supplementary Provisions

Chapter I General Provisions

Article 1 This Law is enacted in order to define the status and make clear the functions and responsibilities of the People's Bank of China, ensure the correct formulation and implementation of the monetary policies of the State, establish and perfect a macro-control system through a central bank and maintain financial stability.

Article 2 The People's Bank of China is the central bank of the People's Republic of China.
The People's Bank of China shall, under the leadership of the State Council, formulate and implement monetary policies, guard against and eliminate financial risks, and maintain financial stability.

Article 3 The aim of monetary policies shall be to maintain the stability of the value of the currency and thereby promote economic growth.

Article 4 The People's Bank of China shall perform the following functions and responsibilities:
(1)to promulgate and carry out the orders and regulations related to its functions and responsibilities;
(2)to formulate and implement monetary policies in accordance with law;
(3)to issue Renminbi ( RMB ) and control its circulation;
(4)to supervise and administer the inter-bank lending market and the inter-bank bond market;
(5)to exercise control of foreign exchange and supervise and administer the inter-bank foreign exchange market;
(6)to supervise and administer the gold market;
(7)to hold, administer and manage the State foreign exchange reserve and gold reserve;
(8)to manage the State Treasury;
(9)to maintain the normal operation of the system for making payments and settling accounts;
(10)to guide and make plans for the fight against money laundering in the financial industry, and to be responsible for monitoring the use of the funds earmarked for the fight against money laundering;
(11)to be responsible for statistics, investigation, analysis and forecasting concerning the financial industry;
(12)to engage in relevant international financial operations in its capacity as the central bank of the State; and
(13)other functions and responsibilities prescribed by the State Council.
To implement monetary policies, the People's Bank of China may carry out financial operations in accordance with the relevant provisions of Chapter IV of this Law.

Article 5 The People's Bank of China shall report its decisions to the State Council for approval concerning the annual money supply, interest rate, foreign exchange rates and other important matters specified by the State Council before they are implemented.
The People's Bank of China shall immediately implement decisions on monetary policies for matters other than those specified by the State Council for the record.

Article 6 The People's Bank of China shall submit to the Standing Committee of the National People's Congress work reports concerning matters of monetary policies and the operations of the financial industry.

Article 7 The People's Bank of China shall, under the leadership of the State Council, implement monetary policies, perform its functions and carry out its business operations independently according to law and be free from intervention by local governments, government departments at various levels, public organizations or individuals.

Article 8 The People's Bank of China is whollly funded and owned by the State.

Article 9 The State Council shall establish a coordinating mechanism for financial supervision and administration. The specific measures therefor shall be formulated by the State Council.

ChapterII Organizational Structure

Article 10 The PBOC shall have a Governor and a number of Deputy Governors.
The candidate for the Governor of the PBOC shall be nominated by the Premier of the State Council and decided by the National People's Congress; when the National People Congress is not in session, the decision shall fall on the Standing Committee of the National People's Congress.
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