It was the only lender in Mao Zedong’s era, taking orders from the top to control the flow of money through the command economy. Now, even after decades of financial liberalization, the People’s Bank of China has its hands on far more levers than other global central banks as it works to keep the nation’s 40-year growth streak humming along.
From its imposing headquarters in Beijing’s Xicheng District, the PBOC relies on a number of tools to direct the flow of liquidity in the $40 trillion-plus financial system. The seven-decade-old institution channels cash to development banks that finance the government’s pet projects and leans on commercial banks when it needs to make it easier or harder for companies and people to borrow. The PBOC has also amassed one of the largest troves of reserves in the world, a $3 trillion horde that’s chock-full of U.S. Treasuries.
