The Renminbi (RMB), China's legal currency, is issued and
controlled solely by the People's Bank of China. RMB exchange rates
are decided by the People's Bank of China and issued by the State
Administration of Foreign Exchange, the latter exercising the
functions and powers of exchange control.?
In 1994, China reformed the foreign exchange system, combined the
RMB exchange rates, adopted the bank exchange settlement system and
set up a unified inter-bank foreign exchange market. On this basis,
China included the foreign exchange business of the
foreign-invested enterprises in the bank's exchange settlement
system in 1996. On December 1, 1996, China formally accepted
Article 8 of the Agreement on International Currencies and Funds,
and realized RMB convertibility under the current account ahead of
schedule. Meanwhile, China has been active in promoting bilateral
currency exchange between ASEAN and China, Japan and the Republic
of Korea (10+3). At the end of 2004, China's foreign exchange
reserves reached US$609.9 billion and its share in the
International Monetary Fund has risen from 11th to 8th place. The
variety of financial businesses has been increasing steadily, and
China has opened an array of new businesses to become integrated
into the various aspects of modern international financial
business, such as consumer credit, securities investment funds and
insurance-linked investments.?