SHANGHAI, Aug. 10 (Xinhuanet) -- The People's Bank of China, or the central bank, inaugurated 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 improve the central bank's capability to regulate the country's financial market and provide better service.

    "Under the current situation, the central bank's existing structure can not meet the need" of the country's economic development, he said.

    The second central bank headquarters is an institution at the vice-ministerial level. Vice Governor Xiang Junbo will be in charge of it.

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

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

    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 New District.

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

    Shanghai has long been deemed as the financial center of China as 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 more than 10 percent of the market share went to foreign investors.

    To further improve the central bank's management, Zhou said previously 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.

    Analysts say the second headquarters will draw the central bankcloser to the financial market.

    On the reform of China's currency exchange rate system, Zhou reiterated Wednesday the central bank would take into consideration a basket of selected currencies.

    The countries and regions and their currencies that take a comparatively major position in China's foreign economic activities concerning foreign trade, foreign debt and foreign direct investment will be taken into account when the center bank adjusts the exchange rate of the Chinese yuan, known as renmibi, said the governor.

    "They will constitute the basket of the currencies and be weighted accordingly," said Zhou. Enditem