China’s banking system has undergone significant changes in the last two decades: banks are now functioning more like banks than before. Nevertheless, China’s banking industry has remained in the government’s hands even though banks have gained more autonomy. China’s accession to WTO will lead to a significant opening of this industry to foreign participation.

The central bank of the People’s Republic of China is the People’s Bank of China.

The “big four” state-owned commercial banks are the Bank of China, the China Construction Bank, the Industrial and Commercial Bank of China and the Agricultural Bank of China.


The system of China banking sector has been changing continuously along with the transition of planned economy into market economy. At present, an organizational system for China banking sector, which separates policy finance from commercial finance and meets the need of contemporary market economy, has been established initially. With People’s Bank of China (PBOC) as the central bank, implementing monetary policy independently, and with state-owned commercial banks as the mainstay, coexisting with various financial institutions, an unified, open, orderly and competitive banking market system has been primarily set up for China banking sector.

Except for PBOC, the central bank, there are four state-owned commercial banks, three policy banks, twelve new joint-stock commercial banks and many city commercial banks and rural credit cooperatives all over the country. Besides, there are 175 business institutions of foreign banks in China. By the end of 1999, there have been altogether 150 thousand banking units with 2 million employment. The total amount of various deposits of financial institutions hit RMB 10,877.9 billion and various loans RMB 9,373.4 billion. The supply of currency and quasi-currency has been RMB 11,989.8 billion, national gold reserve 12.67 million ounces and foreign reserve US$ 154.7 billion.

During the period of “Tenth Five-year Plan”, China banking sector will face important development opportunities, and severe challenges as well. With the deepening of market economy, the role of banking sector in the overall operation of national economy will be greatly enhanced, thus providing unprecedented opportunities for the prosperity of banking sector. However, with the speed up of world economic integration process and the gradual opening of financial market after China’s entry into WTO, China banking sector will have to face more powerful competition and challenges from overseas intruders.

Summary from the “Outlook on Banking Industry in China”
Published: January 2002
Publisher: CIEC China International Economic Consultants

See also…

Banking in China, From Wikipedia

Doing Business in China (Law Forum)