A paradigm shift for China's central banking system

摘要

This paper recognizes the challenges faced by the People's Bank of China in its central banking endeavor. The fundamental problem lies with the entrenchment of party politics within the government, which compromises its operations. We conclude that it needs to make a paradigm shift from its current controlled disposition to one that calls the shots in all central banking decisions, especially now that more is expected of it with China becoming a member of the World Trade Organization. However, the relationship between the government and the party has to be changed before it can enjoy the manifestations of a truly independent central bank.