LAUSR

ABSTRACT The People’s Bank of China (PBC)has played an important role in China’s sustained economic growth. Despite its limited formal independence, PBC has developed considerable de facto authority and autonomy, referered to here as central bank discretion (CBD). This article offers a detailed historical account of how PBChas gained growing CBD in areas such as monetary policy, financial stability, foreign exchange and financial regulation. It also analyzes the main underlying forces that have contributed to PBC’s authority and autonomy.This study of CBD in China seeks to enrich the existing literature on the political economy of central banking, which has so far focused heavily on the concept of central bank independence (CBI).