The?People's Bank of China (PBC), or the central bank, opened its second headquarters in Shanghai, the country's financial hub, on Wednesday.

Zhou Xiaochuan, governor of the central bank, said the Shanghai headquarters was designed to enhance the central bank's ability to regulate the country's financial market and provide better service.

"The central bank's existing structure cannot meet the needs" of the country's economic development, Zhou said.

The second headquarters are an institution at the vice-ministerial level. Vice Governor Xiang Junbo of PBC has been put in charge.

With the establishment of the Shanghai headquarters, some departments of the central bank whose businesses are closely related to the market will be moved from Beijing.

The Shanghai headquarters will perform the central bank's executive functions, while the policy making function will remain with the Beijing headquarters, according to local officials.

The Shanghai headquarters have five key responsibilities, including regulating the financial market, conducting financial supervision, making financial and trust analyses, and coordinating regional financial cooperation.

The headquarters will be composed of 16 to18 departments or centers with staff numbers to be enlarged to 700 within three years.

The headquarters will be located in the financial area of Lujiazui in Shanghai's Pudong New District.

The Shanghai Branch of the central bank will remain, and the headquarters operate separately.

Shanghai has long been deemed the financial center of China. Many leading financial institutions, such as China's foreign exchange market, the interbank lending market, the gold market, the diamond market as well as the Shanghai Stock Exchange, are located in the municipality.

At the end of last year, Shanghai had 300 financial institutions. Foreign investors had more than 10 percent of the market share.

To further improve the central bank's management, Zhou said it would possibly transfer some of its nationwide businesses, such as payment and liquidation as well as a consulting system for national credit information to Shanghai and hence set up the second headquarters there.

Analysts say that the Shanghai headquarters will draw the central bank closer to the financial market.

(Xinhua News Agency August 10, 2005)