TNAG-2792-FCO40-4031-Relations-between-Hong-Kong-and-China-1993 — Page 122

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developing facilities for government intervention

in the financial markets.

45.

level (12).

Reportedly, PBOC will trim its operations at the

sub-provincial

Control over regional

activities will instead be exercised through six regional

branches covering the North, Northeast, Northwest, East, South and Southwest of China. These regional branches will be supervised directly by the head office in Beijing. The basic intention is to ensure that major loan approvals are

kept under close scrutiny by the head office and are free

from intervention by the local authorities. Monetary

policy targets will be set by a new Monetary Policy Committee directly responsible to the National People's Congress (13).

46.

PBOC will

commercial banking

central bank will be

to

hence stop its direct involvement in

activities.

Its main task as the

exercise macro-monetary control

(12)

This

(13)

will involve cutting back the 2 300 branches of PBOC at the xian level. Around 100 000 staff thus will be re-deployed to new activities. See footnote (14) below.

released

This new committee is proposed in a draft of the forthcoming "Central Banking Law", which aims to give PBOC a clear role as the central bank and lay down its central banking functions and powers. The committee will take over the making of decisions on interest rates, credit policies, currency issues and other related monetary matters from the State Council.

The Governor of the Central Bank will chair the committee. Members will include the heads of the six regional branches of PBOC, as well as representatives from such ministries as the Ministry of Finance, Ministry of Foreign Trade and Economic Cooperation, and State Planning Commission. Members are to be appointed by the Premier for a term of about five years.

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