{
  "title": "China: Strengthening Monetary Policy Implementation",
  "publication": "IMF Working Papers, January 1, 2007",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2016/12/31/china-strengthening-monetary-policy-implementation-20230",
  "canonical": "https://www.imf.org/en/publications/wp/issues/2016/12/31/china-strengthening-monetary-policy-implementation-20230",
  "overlayPath": "/en/publications/wp/issues/2016/12/31/china-strengthening-monetary-policy-implementation-20230/index.md",
  "summary": "The People's Bank of China (PBC) has made great strides in modernizing its monetary policy frameworks but their effectiveness will diminish as the sophistication of the economy increases.",
  "sections": [
    {
      "heading": "Summary and main findings",
      "content": "- The People's Bank of China (PBC) has made great strides in modernizing its monetary policy frameworks but their effectiveness will diminish as the sophistication of the economy increases.\n- Empirical evidence supports:\n  - maintaining a reference to money in China's monetary strategy, and\n  - enhancing the role of interest rates in its conduct.\n- The authors advocate adoption of an eclectic strategy involving:\n  - monitoring of several indicators, and\n  - a short-term interest rate as the operational target.\n- The PBC should be granted discretion to change its policy rate.\n- There are no technical obstacles for such a move to occur in the near future."
    },
    {
      "heading": "Empirical basis and scope",
      "content": "- The paper presents empirical evidence supporting the continued reference to money in strategy and increased emphasis on interest rates.\n- Subject areas covered: Bank credit, Banking, Inflation, Monetary base, Money markets.\n- Keywords: banking sector, excess reserves, foreign exchange, inflation targeting, interbank market, money supply, WP."
    },
    {
      "heading": "Policy recommendations and operational implications",
      "content": "- Maintain a reference to monetary aggregates in the monetary strategy.\n- Enhance the role of interest rates in monetary policy conduct.\n- Adopt an eclectic strategy that monitors several indicators rather than relying on a single nominal anchor.\n- Use a short-term interest rate as the operational target for monetary policy.\n- Grant the PBC discretion to change its policy rate to improve policy responsiveness.\n- Technical feasibility: the paper asserts there are no technical obstacles to implementing a policy-rate based operational framework in the near future.\n\n---\n\n Content in this bundle\n\n- wp0714\n  - wp0714 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - wp0714 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/31/china-strengthening-monetary-policy-implementation-20230"
    }
  ],
  "bullets": [
    "[Markdown version](/en/publications/wp/issues/2016/12/31/china-strengthening-monetary-policy-implementation-20230/index.md)",
    "[Structured JSON version](/en/publications/wp/issues/2016/12/31/china-strengthening-monetary-policy-implementation-20230/index.json)",
    "[Bundle manifest](/en/publications/wp/issues/2016/12/31/china-strengthening-monetary-policy-implementation-20230/bundle-manifest.json)",
    "Authors: Bernard J Laurens, Rodolfo Maino",
    "Published: January 1, 2007",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781451865783.001",
    "The People's Bank of China (PBC) has made great strides in modernizing its monetary policy frameworks but their effectiveness will diminish as the sophistication of the economy increases.",
    "Empirical evidence supports:",
    "The authors advocate adoption of an eclectic strategy involving:",
    "The PBC should be granted discretion to change its policy rate.",
    "There are no technical obstacles for such a move to occur in the near future.",
    "The paper presents empirical evidence supporting the continued reference to money in strategy and increased emphasis on interest rates.",
    "Subject areas covered: Bank credit, Banking, Inflation, Monetary base, Money markets.",
    "Keywords: banking sector, excess reserves, foreign exchange, inflation targeting, interbank market, money supply, WP.",
    "Maintain a reference to monetary aggregates in the monetary strategy.",
    "Enhance the role of interest rates in monetary policy conduct.",
    "Adopt an eclectic strategy that monitors several indicators rather than relying on a single nominal anchor.",
    "Use a short-term interest rate as the operational target for monetary policy.",
    "Grant the PBC discretion to change its policy rate to improve policy responsiveness.",
    "Technical feasibility: the paper asserts there are no technical obstacles to implementing a policy-rate based operational framework in the near future.",
    "**_wp0714**"
  ],
  "related": [
    {
      "title": "_wp0714",
      "role": "document",
      "sourceUrl": "https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2007/_wp0714.pdf",
      "summary": {
        "path": "/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2007/_wp0714.pdf.md",
        "mime": "text/markdown"
      },
      "binary": {
        "path": "/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2007/_wp0714.pdf",
        "mime": "application/pdf"
      }
    }
  ],
  "alternates": {
    "markdown": "/en/publications/wp/issues/2016/12/31/china-strengthening-monetary-policy-implementation-20230/index.md",
    "json": "/en/publications/wp/issues/2016/12/31/china-strengthening-monetary-policy-implementation-20230/index.json",
    "bundleManifest": "/en/publications/wp/issues/2016/12/31/china-strengthening-monetary-policy-implementation-20230/bundle-manifest.json"
  },
  "generatedAtUtc": "2026-09-17T10:47:03.816Z"
}