The 23rd ZHM Lecture -the latest of the series - was held at SBP, Karachi on April 19, 2019. This year's lecture was delivered by Dr. Zhou Xiaochuan on "Lessons from the Role of People's Bank of China in China's Economic Rise".

Dr. Zhou served as Governor of People's Bank of China (PBoC) during 2002-2018 - the longest-serving central bank governor in China’s history. During his tenure, China became the second largest economy in the world, and a consequential player in global financial markets. He also served as the Chairman of the Monetary Policy Committee of the PBoC from 2003 to 2018. Currently, he acts as a member of the Group of Thirty (G30) and Chinese Economists 50 Forum, besides maintaining teaching positions at Tsinghua and other institutions. Dr. Zhou remained a strong advocate for effective regulation of banks, including maintaining higher reserves; and called for global financial reforms, notably reduction in dependency on the USD at the International Monetary Fund in favour of a multinational currency reserves.

Dr. Zhou established himself as a scholar, publishing numerous papers and books that reflected his reformist bent, including “March Towards an Open Economic System”, and “Addressing Risks During Transformation”. He also won the UK's 2019 Central Banking lifetime achievements award. He is widely recognized for his contributions to push through fundamental changes that transformed China from a centrally planned to a market-based economy.

In his lecture, Dr. Zhou touched upon several issues pertaining to central banking including objectives of a central bank, the communication strategy, the role of central bank in development of foreign exchange, derivative, stock exchange and corporate bonds markets, and the significance of fiscal discipline in enhancing monetary policy effectiveness. He also highlighted the role of PBoC in the process of re-structuring of financial institutions in China. He argued that reforms in PBoC reflect China’s gradualist approach towards globalization for sustainable economic development. He emphasized on gradual liberalization of exchange rate, monetary and capital account regimes to facilitate greater role for market forces without large-scale disturbances. He also elaborated how PBoC provided incentive structures to channelize financial resources toward productive sectors to ensure inclusive growth and financial stability.

In case of Pakistan, Dr. Zhou emphasized to raise the domestic savings rate in order to address most of the macroeconomic imbalances including current and fiscal deficits. Further, he suggested to use regional currencies in order to facilitate trade in the region.