The Renminbi and Foreign Exchange Control
The Renminbi (RMB), China's legal currency, is
issued and controlled solely by the People's Bank
of China. RMB exchange rates are decided by the
People's Bank of China and issued by the State
Administration of Foreign Exchange, the latter
exercising the functions and powers of exchange
control.
In 1994, China reformed the foreign exchange
system, synchronized the official foreign exchange
rate and the adjusted foreign exchange rate with
RMB. RMB exchange rates, adopted the bank exchange
settlement system and set up a unified inter-bank
foreign exchange market. On this basis, China
included the foreign exchange business of foreign-invested
enterprises in the bank's exchange settlement
system in 1996. On December 1, 1996, China formally
accepted Article 8 of the Agreement on International
Currencies and Funds, and realized RMB convertibility
under the current account ahead of schedule. Meanwhile,
China has been active in promoting bilateral currency
exchange between ASEAN and China, Japan and the
Republic of Korea (10+3). At the end of 2005,
China's foreign exchange reserves reached US$818.9
billion. China's share in the International Monetary
Fund had risen from 11th to 8th place. The variety
of financial businesses has grown steadily, and
China has opened an array of new businesses to
become integrated into the various aspects of
modern international financial business, such
as consumer credit, securities investment funds
and insurance-linked investments.
Stock Market
In 1990 and 1991, China set up securities exchanges
in Shanghai and Shenzhen. In the past decade,
the Chinese stock market has grown to complete
a journey that took many countries a hundred years
or more to cover. The Chinese stock market has
promoted the reform of state-owned enterprises
and the change of their systems, and enabled a
stable transition between the two systems. As
for ordinary citizens, the stock market has joined
bank deposit accounts to become one of the most
important channels for investment.
Methods of trading in stocks are constantly being
improved. Today, a network system for securities
exchange and account settlement has been formed,
with the Shanghai and Shenzhen exchanges as the
powerhouse, radiating to all parts of the country.
According to 2005 statistics, there were 1,381
listed companies, with a total market value of
3,243 billion yuan and 73.36 million investors.
China issued 20 kinds of A share, and 2 rights
issues, collecting a total of 33.8 billion yuan;
and 24 kinds of H share, collecting a total of
154.5 billion yuan.
|
HOME
