PBOC Unveils Reform Blueprint for Central Bank System Modernization

The People’s Bank of China (PBOC) has issued its “15th Five-Year Plan Reform and Development Plan,” a comprehensive blueprint aimed at accelerating the improvement of the central bank system and building a strong financial nation. The plan, released alongside nine supporting action plans covering sub-sector areas, outlines five key tasks for the 2026-2030 period, according to Xinhua News.

The plan’s central focus is the systematic restructuring of foundational institutions including monetary policy, macroprudential regulation, and financial stability. As People’s Daily reported, the blueprint places the construction of a scientific and prudent monetary policy system and a comprehensive macroprudential management system at the top of its agenda.

Context: The 15th Five-Year Plan and Financial Reform

The 15th Five-Year Plan period (2026-2030) represents a critical phase in China’s modernization drive. The 20th CPC Central Committee’s 4th Plenary Session in October 2025 reviewed recommendations for the plan, establishing the goal of building a strong financial nation as a key strategic objective. The session proposed constructing a scientific and prudent monetary policy system alongside a comprehensive macroprudential management system.

China’s central bank operates under a “dual-pillar” framework, combining monetary policy as the first pillar with macroprudential management as the second. This framework has been evolving since the 2017 National Financial Work Conference, which strengthened the PBOC’s macroprudential management and systemic risk prevention responsibilities. In January 2026, the PBOC established a Macroprudential and Financial Stability Committee to coordinate these efforts.

Key Tasks of the Reform Plan

The plan outlines five primary tasks for the 15th Five-Year Plan period. The first focuses on building a scientific and prudent monetary policy system and a comprehensive macroprudential management system. This includes refining China’s modern monetary policy framework with distinctive characteristics, improving the base money supply mechanism, and developing market-based interest rate formation, regulation, and transmission mechanisms. The plan also calls for maintaining RMB exchange rate stability at a reasonable equilibrium level while expanding macroprudential management coverage.

According to 21st Century Business Herald, the second task emphasizes continuously enhancing the quality and efficiency of financial services for the real economy. This involves building a technology finance system suited to technological innovation, constructing a high-quality “technology board” in the bond market, improving green finance and low-carbon transition support, and strengthening services for inclusive, pension, and digital finance.

The remaining tasks focus on building an open, inclusive, vibrant, and resilient modern financial market; steadily advancing high-level financial opening-up; and optimizing financial infrastructure and central bank service systems.

Expert Analysis: A Fundamental Transformation

Industry experts have characterized the plan as marking a significant acceleration in the modernization of the central bank’s governance system. Dong Ximiao, Chief Economist at Zhaolian, noted that the plan focuses on the core proposition of “accelerating the improvement of the central bank system,” systematically restructuring basic institutions such as monetary policy, macroprudential regulation, and financial stability.

Tian Lihui, Professor of Finance at Nankai University, emphasized the significance of the dual-pillar approach. “From past experience, risks tend to accumulate in regulatory blind spots,” Tian said. “When the macroprudential net is woven more densely, shifting from ‘firefighting after the fact’ to ‘fire prevention before the fact,’ this is a fundamental transformation of the central bank’s function from ‘passively responding to risks’ to ‘proactively shaping the security landscape.’”

Tian Xuan, Dean of the Guanghua School of Management at Peking University, highlighted the plan’s emphasis on combining cross-cyclical and counter-cyclical adjustments. “The Plan’s monetary policy framework continues the overall tone of being scientific and prudent, but places greater emphasis on precision and flexibility,” Tian said, noting that the shift from quantitative to price-based monetary policy controls will enhance China’s financial system resilience against external shocks.

Financial Services for the Real Economy

A key theme of the plan is redirecting financial resources toward strategic priorities. Dong Ximiao projected that during the 15th Five-Year Plan period, the central bank will guide financial resources from “inclusive coverage” to “precise drip irrigation,” supporting key core technology breakthroughs through the construction of a technology finance system and the bond market’s “technology board.”

Tian Lihui observed that the plan’s proposal to “construct a technology finance system suited to technological innovation” signals a structural shift in how financial services support the real economy. “When the economy transitions from factor-driven to innovation-driven growth, the logic of financial resource allocation must switch simultaneously,” he said, describing the move from traditional collateral-based lending to a technology-focused credit evaluation approach.

Tian Xuan added that “technology finance” has been significantly elevated in status, with technology enterprises expected to gain more diversified financing channels and increased long-term innovation capital supply.

RMB Internationalization and Financial Opening-Up

The plan places renewed emphasis on RMB internationalization, proposing to expand the currency’s use in international trade and investment. Key initiatives include deepening two-way opening of financial markets, strengthening cross-border connectivity of financial infrastructure, and promoting the development of offshore RMB markets.

Tian Xuan highlighted the strategic importance of these measures. “RMB internationalization has again been placed in a prominent position,” he said, noting that the plan aims to increase the actual usage rate of RMB in trade settlement, investment and financing, and financial transactions. He pointed to the CIPS cross-border payment system development, Hong Kong offshore RMB market construction, and Shanghai international financial center development as key opening-up priorities.

The plan also calls for improving the multi-level, wide-coverage RMB cross-border payment system, accelerating the construction of Shanghai as an international financial center, and consolidating Hong Kong’s status as an international financial hub.

What’s Next

During the 15th Five-Year Plan period, the PBOC has committed to fully implementing the plan’s measures to accelerate the building of a strong financial nation and support high-quality economic development. The reforms signal a comprehensive acceleration of the central bank’s governance modernization, with implications for China’s financial markets, banking sector, and international economic engagement.

Observers will be watching for concrete implementation details, particularly around the restructuring of the Macroprudential Assessment (MPA) system, the development of the bond market’s “technology board,” and progress on RMB internationalization milestones. The plan’s success will depend on the PBOC’s ability to balance financial stability with innovation-driven growth in an increasingly complex global economic environment.

As China embarks on this ambitious reform agenda, the evolution of its central bank system will be closely monitored by financial markets worldwide, given the country’s growing influence in the global economy and financial system.