China’s Central Bank Unveils Major Reforms at Lujiazui Forum
SHANGHAI — People’s Bank of China (PBOC) Governor Pan Gongsheng announced six major financial policy measures at the opening of the 2026 Lujiazui Forum on June 17, signaling a significant acceleration in China’s financial sector opening-up and the internationalization of the renminbi (RMB). The measures include an offshore RMB forex trading pilot in the Shanghai Free Trade Zone (FTZ), a new repo facility for foreign central banks, and a comprehensive offshore finance action plan.
A Sweeping Package of Reforms
Speaking at the forum’s opening ceremony, Pan outlined six key initiatives that address multiple dimensions of China’s financial modernization, as reported by CCTV News.
First, the PBOC will refine its short-end interest rate regulation mechanism by narrowing the interest rate corridor from 70 to 50 basis points, with the 7-day reverse repo rate serving as the anchor at ±25 basis points. The central bank will also introduce overnight reverse repo operations to better manage short-term liquidity.
Second, a new FIMA RMB Repo Facility will be created, allowing foreign central banks, international financial organizations, and sovereign wealth funds to use Chinese government bonds as collateral to obtain RMB liquidity from the PBOC. This directly addresses a key barrier to foreign central banks holding RMB assets — the ability to access liquidity without selling their bond holdings.
Third, in what analysts describe as a landmark step, the PBOC will authorize six major banks — ICBC, ABC, BOC, CCB, BOCOM, and CITIC Bank — to conduct offshore RMB foreign exchange trading in the Shanghai FTZ using the China Foreign Exchange Trade System (CFETS) platform. As The Paper reported, Pan stated that the pilot aims to “promote two-way opening of the foreign exchange market” and “help Shanghai become a global RMB asset allocation and risk management center.”
Fourth, the PBOC will research a new macroprudential tool for non-bank liquidity support under specific scenarios. During systemic stress events where normal liquidity channels are blocked, the central bank would provide emergency liquidity to non-bank institutions via swaps, while maintaining safeguards against moral hazard.
Fifth, the “Shanghai International Financial Center Offshore Finance Action Plan” was jointly issued by the PBOC, the National Development and Reform Commission (NDRC), the National Financial Regulatory Administration (NFRA), the China Securities Regulatory Commission (CSRC), the State Administration of Foreign Exchange (SAFE), and the Shanghai Municipal Government. As detailed by CCTV Finance, the plan covers offshore finance pilots in Pudong, fund flow management, digital applications, and legal frameworks.
Sixth, the interbank market data repository was officially listed, centralizing transaction, custody, and settlement data to enhance market oversight.
A Historic Shift in China’s Financial Structure
Pan used the forum platform to highlight a fundamental transformation in China’s financial architecture. In 2025, direct financing through bonds and stocks accounted for 47% of incremental social financing, surpassing loans (45%) for the first time in modern Chinese financial history, according to Pan’s full speech published on Baidu Baike.
The governor noted that over the past decade, the share of loans to real estate and infrastructure in new lending has dropped from over 60% to approximately 10%, while loans for technology, green finance, inclusive finance, pension, and digital finance — the “Five Major Articles” — have risen to over 70% of new lending.
Regulatory Voices at the Forum
NFRA Chairman Ding Xiangqun, who delivered the opening address as the forum’s co-chair, announced a crackdown on financial black and gray industries and pledged support for resolving real estate and local government debt risks. Ding also confirmed support for piloting new financial businesses in Shanghai and acceleration of revisions to the Banking Supervision Law and Insurance Law, as 21st Century Business Herald reported.
CSRC Chairman Wu Qing announced that the STAR Market will expand its fifth set of listing standards to include AI large model enterprises, and will support quantum technology and biomanufacturing companies to list.
Building on 2025’s Momentum
The 2026 announcements build on last year’s eight policy measures from the Lujiazui Forum, particularly the Free Trade Account (FTA) function upgrade. As of June 2026, 11 banks and 37 enterprises have participated in the FTA pilot, with cross-border fund flows exceeding RMB 120 billion, demonstrating tangible results from China’s incremental approach to financial opening.
Implications for RMB Internationalization
The new measures represent the next phase of RMB internationalization. The FIMA RMB Repo facility gives foreign central banks a practical tool for managing RMB liquidity, potentially boosting demand for Chinese government bonds. The offshore RMB forex trading pilot in Shanghai FTZ bridges the gap between China’s onshore (CNY) and offshore (CNH) RMB markets, which could reduce exchange rate divergence.
Pan noted during his speech that the RMB has already become the second largest trade finance currency globally. Shanghai has set a target to basically become a global RMB asset allocation and risk management center by 2030, with a goal of becoming a strong international financial center matching China’s comprehensive national power by 2035.
What to Watch
Implementation details remain to be specified for several measures, including the timeline for the offshore RMB forex trading pilot and the eligibility criteria for the FIMA RMB Repo facility. The non-bank liquidity support tool’s trigger conditions will need clear definition to balance financial stability with moral hazard concerns. Market participants will also be watching how these measures interact with Hong Kong’s role as a global offshore RMB hub.
The 2026 Lujiazui Forum, now in its 16th edition, features over 70 Chinese and international guests across eight plenary sessions over two days, including the first-ever “Sci-Tech Finance Conference” and “Financial Rule of Law International Symposium.”