Abstract

Since the inception of market-oriented reforms in China more than 15 years ago, the role, instruments, and conduct of monetary policy have undergone significant changes, as has the structure of the banking and financial systems. One of the most important changes was the creation of a two-tier banking system in 1984 when the PBC was established as a central bank, responsible for the conduct of monetary policy and supervision of the financial system, while policy and commercial lending operations were assigned to four specialized banks.23

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