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China Briefings

Reports on China issued by Samsung Economic Research Institute

China Business Intelligence No. 214

China Business Intelligence No. 214

Samsung Economic Research Institute Beijing Office

Aug. 3, 2012

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China's central bank has allowed banks to widen the range of interest rate change, making a significant step forward in marketization of interest rates. Indeed, there is the need for the marketization: below-zero deposit rates caused a large loss of deposits for banks, the number of investment and trust products surged; the yuan becomes globalized and capital account is increasingly open. Although a complete abolishment of regulations on interest rates in a short period is impossible, marketization will continue to proceed. The widening of the range of interest rate change is expected to promote diversification of bank services and improvement of risk management systems and management efficiency

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