Banking and Its Supervision

Currently China has developed a banking system in which the central bank has a controlling role, national banks are the main body and there is a separation between policy-banking and commercial banking.

The People's Bank of China is the central bank and conducts macro-economic policy and supervises the national banking industry.

The state-owned commercial banks include; The Industrial and Commercial Bank of China, The Bank of China Agricultural, The Bank of China, and The Construction Bank of China. There are three policy banks; the Agricultural Development Bank of China, China Development Bank and the Export-Import Bank of China.

In 1995, China passed the "Commercial Bank Law", creating the legal conditions for the establishment of commercial banks. The law offers the legal basis for national specialized banks to transform themselves into state-run commercial banks.

Since 1996, China's financial industry has been very progressive. In order to manage modern financial institutions, the state-owned commercial banks set up more than 120 medium and small commercial banks, to standardize and develop financial institutions.

The China Banking Regulatory Commission is the watchdog for banks in China. It was established on April 28, 2003 and is responsible for making the rules and regulations for the financial and banking institutions it supervises. It also supervises these institutions through on-the-spot and general supervision. It will investigate and prosecute unlawful practices in accordance with the law.