Economy, Currency and Banking

China’s basic unit of currency is the renminbi, commonly called the yuan (8.28 yuan equal U.S.$1; 2000 average). The country’s banking system is under government control. The People's Bank of China is the central financial institution, and it issues all Chinese currency. However, China's international accounts and foreign currency arrangements are primarily the concern of the Bank of China, which has more than 500 foreign branches. In addition, China has four other major banks: the Agricultural Bank of China, which is responsible for making loans to the rural sector; the Bank of Communications of China, a commercial bank; the Industrial and Commercial Bank of China, which handles industrial and commercial credits and international business; and the People's Construction Bank of China, which deals with funds for basic construction. The China International Trust and Investment Corporation raises funds for investment in China and helps arrange joint ventures inside the country and overseas. There are stock exchanges in Shanghai, Shenzhen, and Tianjin.

Post-1979 reforms to the banking sector include the strengthening of the role of the People's Bank of China and the establishment of new commercial banks. Many major foreign banks and insurance companies now have offices in China, and foreign participation in China’s banking, insurance, and financial services is expected to continue to rise.