The PBOC and the State Administration of Foreign Exchange are the two most important domestic institutions directly involved in policymaking for, and management of, renminbi. Broadly speaking, SAFE is entrusted to handle foreign- exchange- specific issues, whereas monetary policy is set by the PBOC. However, news on some important changes to foreign- exchange policies are announced by the PBOC. For those who are not interested in the nuances of politics, especially the Chinese variety, these two organisations should be seen as the same entity for most practical purposes. The head of SAFE was usually a deputy governor of the PBOC.

SAFE’s main role is to plan, supervise and administer foreign exchange control in China. SAFE approves foreign- exchange transactions associated with China’s vast foreign- trade- flow- based documentations; it supervises the foreign-currency borrowings of all onshore institutions; it sets the rules for and monitors the trading activities of onshore foreign- exchange markets; it intervenes in foreign- exchange markets to implement the exchange- rate policy; and it manages the main part of China’s foreign- exchange reserve portfolio. Therefore, its influence on China’s financial system is wide- ranging and significant.

A few other institutions are also frequently mentioned when various questions relating to renminbi are discussed. The hierarchical relationships between these institutions based in the mainland are shown in the figure below, as are the main parties involved in the onshore interbank foreign- exchange market.


Offshore, Hong Kong Monetary Authority, Hong Kong Securities and Futures Commission and Hong Kong Treasury Market Association are closely involved in the regulation of the offshore renminbi.

Broadly speaking, the onshore regulations on renminbi-foreign currency conversion and trading is extremely complex whereas the offshore regulations generally following the market convention on foreign exchange trading, which is extremely lax.  Further information can be found on subpages in this section. Websites of various regulatory bodies and comments can be found in Miscellaneous page.


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