Former PBOC governor to accept lifetime achievement award

UK's Central Banker magazine is set to honor Zhou Xiaochuan, the former governor of the People's Bank of CHINA (PBOC) with a lifetime achievement Award in London on Wednesday.

Ahead of the Award ceremony, Zhou gave an "icebreaker" lecture at the Chatham House, home of the Royal Institute of International Affairs, which was co-hosted by the Chinese Chamber of Commerce in the UK and the 48 Group Club that promotes CHINA-UK trade.

Fondly known as Mr. Remnimbi (RMB), Zhou was CHINA's longest-serving central banker. He has made a tremendous impact in terms of CHINA's financial and monetary reforms. And he also steered the ship in maintaining CHINA's financial stability during the global financial crisis.

In the lecture, Zhou said that CHINA is still on a path of reform with challenges ahead. As to emerging markets, Zhou mentioned that it has always been an issue about how to deal correctly with exchange rate policy and capital flow. And he acknowledged that CHINA's economic policymakers had not always got it right, but that they had learned important lessons from other emerging markets.

Governor Zhou played a pivotal role in CHINA's move toward greater exchange and interest rate liberalization. RMB remained fixed at 8.2 to the U.S. dollar since the Asian financial crisis until 2005 when Beijing announced the abandonment of the currency's peg to the U.S. dollar in favor of a basket of currencies.

Zhou attends a seminar on the international financial architecture in Paris, France, March 31, 2016. /VCG Photo

Zhou played a central role in the internationalization of the RMB. That came as the central bank supported the offshore development of the RMB in Hong Kong and elsewhere, and encouraged bilateral settlements in RMB when it made commercial sense. The highlight came in 2016 when the RMB was included in the IMF's special drawing rights (SDR) as the fifth currency.

Zhou led profound banking reforms from 2002, and pioneered financial liberalizations throughout his governorship. The PBOC under Zhou's leadership also facilitated the reform of CHINA's capital markets in 2005 by promoting the flotation of state shares.

The central bank was an early supporter of foreign capital in CHINA's A-share market, under the Qualified Foreign Institutional Investor (QFII) scheme. Zhou also introduced medium-term notes – corporate bonds in all but name – of up to five years in 2008, effectively kick-starting the corporate bond market.

(CGTN's Wu Zheyu and Juliet Mann also contributed to the story)