People's Bank of China (PBC) hascarried out a major and comprehensive reform of the ChinaNational Payments System (CNPS). The PBC implemented theChina National Advanced Payment System (CNAPS), whichconsists of the High-Value Payment System (HVPS) and theBulk Electronic Payment System (BEPS). The HVPS systemcurrently operates in a tiered way with a nationalprocessing center (NPC) and 32 local processing centers(LCPs). The HVPS system is interconnected to many trading,payments, and securities settlement systems (SSS) to allowfor central bank money settlement. In addition, there isnumerous cheque clearing houses around the countryadministered by the PBC local offices or delegated to banks.China Union Pay (CUP) handles the clearance of cardstransactions whose balances are settled in the HVPS. Alsoautomated clearinghouses (ACHs) and other systems handleclearance and settlement for a variety of paymentinstruments. The HVPS is a systemically important paymentsystem, as it is the backbone of the national paymentssystem in China. The HVPS handled transactions for a valueof CY 804 trillion in 2009, approximately 24 times the GrossDomestic Product (GDP) value. Thus, the HVPS is beingassessed against the ten Core Principles for SystemicallyImportant Payment Systems (CPSIPS) of the Committee forPayment and Settlement Systems (CPSS) and the fourresponsibilities of the central banks in applying theCPSIPS. The BEPS is not currently a systemically importantpayment system. However, its importance for an efficientsettlement of the interbank payment system is growing. Thepresent document is the assessment of the systemicallyimportant payment systems in the People's Republic ofChina (PRC) based on the CPSS CPSIPS. The document alsocontains an analysis of some developmental issues related tothe reform of the payments system as a whole. The assessmentwas conducted in the context of the first field mission ofthe Financial Sector Assessment Program (FSAP) to the PRC(June 2010).
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