In beijing, a city of grandiose government offices, the central bank stands out for its modesty. Its headquarters are small and dated; plans for a big, gleaming extension have so far come to nothing. Cramped as they are, however, these digs are an apt symbol of the central bank's restraint. For nearly four years the People's Bank of China (pboc) has classified monetary policy as "prudent", which is supposedly a neutral stance-not too tight, not too loose. In reality it has been tightening, to cool an overheated property market and slow the alarming accretion of debt. At the same time, the central bank has chipped away at vestiges of central planning with changes to its currency and interest-rate regimes. The pboc is far from independent, but under Zhou Xiaochuan (pictured), its governor since 2002, it has acquired real clout as it has doggedly pursued its dual objectives of restraint and reform.
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