County Branch Of The People's Bank Of Function Orientation

Any discuss about the function of People's Bank of China county branch is essentially related to organization system construction of the central bank's internal institutional design. In 1984, the State Council declared that the PBoC functioned solely as the central bank. The promulgation of "People's Bank of China Law" in 1995 first ever established the PBoC's position as central bank by national legislation. In 1998, the State Council agreed on the PBoC's reform on establishment of nine cross-province branches. In 2003, further reform was conducted on the PboC,which includes the function of financial supervision etc. For the time being, the financial management framework has eventually evolved as so called "One Bank plus Three Commission". Meanwhile, the organization system of PBoC is defined as four-tier institutions:Head office, Branch, Central Sub-branch and County branch. However, the unified understanding on the county branch's function has not yet been reached. To some extent, this will put negative impact on the function performance of the PBoC's county branch.Based on analysis on China's current and economic development, the author presents an idea that rural finance is a key approach to develop county-level economy. From the perspective of central bank's role and monetary policy along with the PBoC's county branch's special management advantage, the author concludes that the PBoC should further strengthen county branch's organization system construction and function implementation.The author addresses that, in order to help the county branch function properly, the central sub-branch should take more responsibilities on detailed guidance and management. The sub-branch should rationally determine each county branch's functioning objective based on each county's economic development and transportation situation ect. In the progress, "One size fits All" policy should be avoided. On the contrary, the central sub-branch should stick to the principle of "One branch One Policy". At the same time, the central sub-branch should adjust the county branch's function dynamically.Discussion on the PBoC's county branch function is a relatively new subject in recent years. Since 2003, the head office of the PBoC has successfully completed the reform on central bank's function. However, for the time being, the transiting progress of county branch's function development has not yet finished. Actually, it becomes a difficult matter to solve because not only the traditional functions of county branch are shrinking, but the new-added function has no clear authorization. The author comes up with his solution by discussing the social rationale of the PBoC's county branch and exploring the functioning of county branch.