section_path: Financial and banking system
section_name: Financial and banking system
paragraph_text: Financial and banking system
  
  China has the world's largest total banking sector assets of around $45.838 trillion (309.41 trillion CNY) with $42.063 trillion in total deposits and other liabilities. Most of China's financial institutions are state-owned and governed. The chief instruments of financial and fiscal control are the People's Bank of China (PBC) and the Ministry of Finance, both under the authority of the State Council. The People's Bank of China replaced the Central Bank of China in 1950 and gradually took over private banks. It fulfills many of the functions of other central and commercial banks. It issues the currency, controls circulation, and plays an important role in disbursing budgetary expenditures. Additionally, it administers the accounts, payments, and receipts of government organizations and other bodies, which enables it to exert thorough supervision over their financial and general performances in consideration of the government's economic plans. The PBC is also responsible for international trade and other overseas transactions. Remittances by overseas Chinese are managed by the Bank of China (BOC), which has a number of branch offices in several countries.
  
  Other financial institutions that are crucial, include the China Development Bank (CDB), which funds economic development and directs foreign investment; the Agricultural Bank of China (ABC), which provides for the agricultural sector; the China Construction Bank (CCB), which is responsible for capitalizing a portion of overall investment and for providing capital funds for certain industrial and construction enterprises; and the Industrial and Commercial Bank of China (ICBC), which conducts ordinary commercial transactions and acts as a savings bank for the public. China initiated the founding of the Asian Infrastructure Investment Bank in 2015 and the Silk Road Fund in 2014, an investment fund of the Chinese government to foster increased investment and provide financial supports in countries along the One Belt, One Road.
  
  China's economic reforms greatly increased the economic role of the banking system. In theory any enterprises or individuals can go to the banks to obtain loans outside the state plan, in practice, 75% of state bank loans go to State Owned Enterprises. (SOEs) Even though nearly all investment capital was previously provided on a grant basis according to the state plan, policy has since the start of the reform shifted to a loan basis through the various state-directed financial institutions. It is estimated that, as of 2011, 14 trillion Yuan in loans was outstanding to local governments. Much of that total is believed by outside observers to be nonperforming. Increasing amounts of funds are made available through the banks for economic and commercial purposes. Foreign sources of capital have also increased. China has received loans from the World Bank and several United Nations programs, as well as from countries (particularly Japan) and, to a lesser extent, commercial banks. Hong Kong has been a major conduit of this investment, as well as a source itself. On 23 February 2012, the PBC evinced its inclination to liberalize its capital markets when it circulated a telling ten-year timetable. Following on the heels of this development, Shenzhen banks were able to launch cross-border yuan remittances for individuals, a significant shift in the PBC's capital control strictures since Chinese nationals had been previously barred from transferring their yuan to overseas account.
  
  China has four of the world's top ten most competitive financial centers (Shanghai, Hong Kong, Beijing, and Shenzhen), more than any other country. China has three of the world's ten largest stock exchanges (Shanghai, Hong Kong and Shenzhen), both by market capitalization and by trade volume. As of 12 October 2020, the total market capitalization of mainland Chinese stock markets, consisting of the Shanghai Stock Exchange and Shenzhen Stock Exchange, topped US$10 trillion, excluding the Hong Kong Stock Exchange, with about US$5.9 trillion.
  
  As of June 2020, foreign investors had bought a total of US$440 billion in Chinese stocks, representing about 2.9% of the total value, and indicating that foreign investors scooped up a total of US$156.6 billion in the stocks just in the first half of 2020. The total value of China's bond market topped US$15.4 trillion, ranked above that of Japan and the UK, and second only to that of the U.S. with US$40 trillion, as of the beginning of September 2020. As of September 2020, foreign holdings of Chinese bonds reached US$388 billion, or 2.5%, of the total value, notwithstanding an increase by 44.66% year on year.
  
  China has the world's largest total banking sector assets of around $45.838 trillion (309.41 trillion CNY) with $42.063 trillion in total deposits and other liabilities. Most of China's financial institutions are state-owned and governed. The chief instruments of financial and fiscal control are the People's Bank of China (PBC) and the Ministry of Finance, both under the authority of the State Council. The People's Bank of China replaced the Central Bank of China in 1950 and gradually took over private banks. It fulfills many of the functions of other central and commercial banks. It issues the currency, controls circulation, and plays an important role in disbursing budgetary expenditures. Additionally, it administers the accounts, payments, and receipts of government organizations and other bodies, which enables it to exert thorough supervision over their financial and general performances in consideration of the government's economic plans. The PBC is also responsible for international trade and other overseas transactions. Remittances by overseas Chinese are managed by the Bank of China (BOC), which has a number of branch offices in several countries.
  
  Other financial institutions that are crucial, include the China Development Bank (CDB), which funds economic development and directs foreign investment; the Agricultural Bank of China (ABC), which provides for the agricultural sector; the China Construction Bank (CCB), which is responsible for capitalizing a portion of overall investment and for providing capital funds for certain industrial and construction enterprises; and the Industrial and Commercial Bank of China (ICBC), which conducts ordinary commercial transactions and acts as a savings bank for the public. China initiated the founding of the Asian Infrastructure Investment Bank in 2015 and the Silk Road Fund in 2014, an investment fund of the Chinese government to foster increased investment and provide financial supports in countries along the One Belt, One Road.
  
  China's economic reforms greatly increased the economic role of the banking system. In theory any enterprises or individuals can go to the banks to obtain loans outside the state plan, in practice, 75% of state bank loans go to State Owned Enterprises. (SOEs) Even though nearly all investment capital was previously provided on a grant basis according to the state plan, policy has since the start of the reform shifted to a loan basis through the various state-directed financial institutions. It is estimated that, as of 2011, 14 trillion Yuan in loans was outstanding to local governments. Much of that total is believed by outside observers to be nonperforming. Increasing amounts of funds are made available through the banks for economic and commercial purposes. Foreign sources of capital have also increased. China has received loans from the World Bank and several United Nations programs, as well as from countries (particularly Japan) and, to a lesser extent, commercial banks. Hong Kong has been a major conduit of this investment, as well as a source itself. On 23 February 2012, the PBC evinced its inclination to liberalize its capital markets when it circulated a telling ten-year timetable. Following on the heels of this development, Shenzhen banks were able to launch cross-border yuan remittances for individuals, a significant shift in the PBC's capital control strictures since Chinese nationals had been previously barred from transferring their yuan to overseas account.
  
  China has four of the world's top ten most competitive financial centers (Shanghai, Hong Kong, Beijing, and Shenzhen), more than any other country. China has three of the world's ten largest stock exchanges (Shanghai, Hong Kong and Shenzhen), both by market capitalization and by trade volume. As of 12 October 2020, the total market capitalization of mainland Chinese stock markets, consisting of the Shanghai Stock Exchange and Shenzhen Stock Exchange, topped US$10 trillion, excluding the Hong Kong Stock Exchange, with about US$5.9 trillion.
  
  As of June 2020, foreign investors had bought a total of US$440 billion in Chinese stocks, representing about 2.9% of the total value, and indicating that foreign investors scooped up a total of US$156.6 billion in the stocks just in the first half of 2020. The total value of China's bond market topped US$15.4 trillion, ranked above that of Japan and the UK, and second only to that of the U.S. with US$40 trillion, as of the beginning of September 2020. As of September 2020, foreign holdings of Chinese bonds reached US$388 billion, or 2.5%, of the total value, notwithstanding an increase by 44.66% year on year.
  
  China has the world's largest total banking sector assets of around $45.838 trillion (309.41 trillion CNY) with $42.063 trillion in total deposits and other liabilities. Most of China's financial institutions are state-owned and governed. The chief instruments of financial and fiscal control are the People's Bank of China (PBC) and the Ministry of Finance, both under the authority of the State Council. The People's Bank of China replaced the Central Bank of China in 1950 and gradually took over private banks. It fulfills many of the functions of other central and commercial banks. It issues the currency, controls circulation, and plays an important role in disbursing budgetary expenditures. Additionally, it administers the accounts, payments, and receipts of government organizations and other bodies, which enables it to exert thorough supervision over their financial and general performances in consideration of the government's economic plans. The PBC is also responsible for international trade and other overseas transactions. Remittances by overseas Chinese are managed by the Bank of China (BOC), which has a number of branch offices in several countries.
  
  Other financial institutions that are crucial, include the China Development Bank (CDB), which funds economic development and directs foreign investment; the Agricultural Bank of China (ABC), which provides for the agricultural sector; the China Construction Bank (CCB), which is responsible for capitalizing a portion of overall investment and for providing capital funds for certain industrial and construction enterprises; and the Industrial and Commercial Bank of China (ICBC), which conducts ordinary commercial transactions and acts as a savings bank for the public. China initiated the founding of the Asian Infrastructure Investment Bank in 2015 and the Silk Road Fund in 2014, an investment fund of the Chinese government to foster increased investment and provide financial supports in countries along the One Belt, One Road.
  
  China's economic reforms greatly increased the economic role of the banking system. In theory any enterprises or individuals can go to the banks to obtain loans outside the state plan, in practice, 75% of state bank loans go to State Owned Enterprises. (SOEs) Even though nearly all investment capital was previously provided on a grant basis according to the state plan, policy has since the start of the reform shifted to a loan basis through the various state-directed financial institutions. It is estimated that, as of 2011, 14 trillion Yuan in loans was outstanding to local governments. Much of that total is believed by outside observers to be nonperforming. Increasing amounts of funds are made available through the banks for economic and commercial purposes. Foreign sources of capital have also increased. China has received loans from the World Bank and several United Nations programs, as well as from countries (particularly Japan) and, to a lesser extent, commercial banks. Hong Kong has been a major conduit of this investment, as well as a source itself. On 23 February 2012, the PBC evinced its inclination to liberalize its capital markets when it circulated a telling ten-year timetable. Following on the heels of this development, Shenzhen banks were able to launch cross-border yuan remittances for individuals, a significant shift in the PBC's capital control strictures since Chinese nationals had been previously barred from transferring their yuan to overseas account.
  
  China has four of the world's top ten most competitive financial centers (Shanghai, Hong Kong, Beijing, and Shenzhen), more than any other country. China has three of the world's ten largest stock exchanges (Shanghai, Hong Kong and Shenzhen), both by market capitalization and by trade volume. As of 12 October 2020, the total market capitalization of mainland Chinese stock markets, consisting of the Shanghai Stock Exchange and Shenzhen Stock Exchange, topped US$10 trillion, excluding the Hong Kong Stock Exchange, with about US$5.9 trillion.
  
  As of June 2020, foreign investors had bought a total of US$440 billion in Chinese stocks, representing about 2.9% of the total value, and indicating that foreign investors scooped up a total of US$156.6 billion in the stocks just in the first half of 2020. The total value of China's bond market topped US$15.4 trillion, ranked above that of Japan and the UK, and second only to that of the U.S. with US$40 trillion, as of the beginning of September 2020. As of September 2020, foreign holdings of Chinese bonds reached US$388 billion, or 2.5%, of the total value, notwithstanding an increase by 44.66% year on year.