Analysis And Discussion About The Way Of Central Bank Independence

In 1995, the Law of the People's Republic of China on the People's Bank of China was adopted and has since legally confirmed the PBC's central bank status and its independency, and the Monetary Policy Committee was established as the monetary policy making and implementing organ.In 1998, the functional region of the PBC was divided into nine parts all over the country, by which the PBC has got rid of the intervention from the local government. The PBC has made a great progress of independency in its history.Since country became a member of the WTO, the economy and the whole country has participated deeply in the economy globalization. However, the possibilities of the international impact also increased, which made it more important to maintain the independency of the central bank.As a result, how to improve this independency and make the monetary policy according to the economy itself became a consequent topic. The research on this topic means theoretic and realistic importance for our economic development and the social stability.Based on this, this article firstly measures and analyze the PBC's independency in different ways by the Law of the People's Republic of China on the People's Bank of China(adopted in 1995, amended in 2003) and the regulation of the Monetary Policy Committee of the PBC(adopted 1997) .Then it compares the independency of the PBC with that of the American central bank and drives a conclusion of shortages of the PBC in target independency, economic independency and political independency.Thirdly, it demonstrates the history, status quo and the rationality of the PBC's independency.Finally, this article provides three suggestion: implementing single objective of monetary policy, guaranteeing the PBC make and execute monetary policy independently, adjusting the composition the the Monetary Policy Committee to become a separated decision-making organ.