The central bank of China is taking a backseat as the Chinese Communist Party expands its influence over monetary policy, according to a report by the Financial Times.
Observers note that several powers once held by the central bank have shifted to the country’s supervisory authority, the China Banking and Insurance Regulatory Commission. Despite the central bank’s ongoing role in daily stock market operations, its authority within the broader economy appears diminished compared with other state-controlled financial institutions it used to guide. This shift is seen as potentially weakening the central bank’s leverage when international investors seek to shape China’s financial policies.
The move to quiet the central bank aligns with a broader effort to address China’s debt challenges and to restart growth after the COVID-19 shock. In this environment, policy sequencing and the balance of power among regulators are under scrutiny as China tries to stabilize finance while preserving party control.
Recent organizational changes have included a reorientation of leadership within the Central Bank, with the party secretary and other party-directed roles influencing strategic direction and priorities.
Meanwhile, discussions around the role of the central bank focus on the deputy governor’s position and related governance issues, illustrating how personnel shifts can reflect deeper policy realignments at the heart of China’s financial system.