A part of Shanghai's Lujiazui business district. [net]

SHANGHAI, Aug. 9 (Xinhuanet) -- People's Bank of China(PBoC), or the central bank, is to open its second headquarters in Shanghai, the country's financial hub in east China, on Wednesday, said a source here Tuesday.

    Senior officials of Shanghai's banking watchdog and some leading financial institutions have been invited to attend Wednesday's launching function.

    The second PBoC headquarters is an institution at the vice-ministerial level. And Xiang Junbo, vice governor of the central bank, will be in charge of the Shanghai headquarters.

    Some of the central bank's departments, whose businesses are closely related to the market, will move to the Shanghai headquarters.

    The second headquarters will perform the central bank's executive functions, while the policy making function will be left in Beijing, said sources with Standing Committee of the Shanghai Municipal People's Congress.

    The Shanghai headquarters will shoulder five tasks, which include regulating the financial market, conducting financial supervision, making financial and trust analysis, and coordinating regional financial cooperation.

    According to the schedule, the central bank's Shanghai headquarters will be composed of 16-18 departments or centers with the staff to be enlarged to 700 within three years.

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

    The Shanghai Branch of the central bank will remain, and the new headquarters will be separated from it.

    The central bank governor Zhou Xiaochuan said in March 2005 that the Shanghai branch has long been held accountable more than PBoC regional branch, since a lot of leading Chinese 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 and over 10 percent of the market share went to foreign investors.

    The second headquarters will draw the central bank closer to the financial market, said analysts.

    For the sake of further improving the central bank's management, Zhou said the central bank 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. Enditem