China Pushes for Alignment of Deposit Benchmark Rates and Market Rates


Beijing has signalled the launch of further efforts to free up interest rate regulation in the Chinese financial system.

On 9 April the Chinese central government issued the “CCP Central Committee and State Council Opinions Concerning the Establishment of Improved Systems and Mechanisms for Market-based Allocation of Factors of Production” (中共中央、国务院关于构建更加完善的要素市场化配置体制机制的意见).

The Opinions include data as a factor of production alongside land, labour, capital and technology, and for greater reform of capital in four key areas:

  1. Improvement to the basic stock market system,
  2. Accelerating the development of the bond market,
  3. Increasing the effective supply of financial services,
  4. Actively and steadily expanding the external opening of the financial sector.

The Opinions also called for “steadily advancing the alignment of deposit benchmark interest rates and market interest rates,” as well as

  • Raising the efficiency of pricing on the bond market,
  • Improving the treasury yield curve as a reflection of market supply and demand relations,
  • Making greater use of the treasury yield curve as a benchmark pricing tool,
  • Strengthening the flexibility of the renminbi exchange rate,
  • Maintaining the fundamental stability of the renminbi exchange rate at a rationally balanced level.

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