Monetary policy surprises and interest rates under China's evolving monetary policy framework

China's monetary policy framework has evolved considerably in the past two decades, increasingly moving from using quantity-based instruments and targets to using price-based instruments and targets. This paper assesses the effectiveness of monetary policy in China by examining the influence of monetary policy on market interest rates using an event-study approach. We find that the effectiveness of price-based instruments in impacting market interest rates increases over time, and that price-based instruments are as effective as quantity instruments during the period since the completion of interest rates liberalization. Furthermore, central bank communications, an increasingly important aspect of monetary policy, affect medium- and long-term market interest rates. Our findings are robust to the use of an alternative measure of monetary policy surprise and an alternative estimation method.