China lifts controls on bank lending rates

AP News
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Posted: Jul 19, 2013 7:52 AM

BEIJING (AP) — China has ended controls on bank interest rates in a move toward making its financial system more market-oriented.

The change announced Friday by the central bank comes amid promises by the ruling Communist Party to make the economy more efficient and productive.

Analysts say one of the most important changes will be to overhaul China's banking industry that subsidizes state industry and lends little to entrepreneurs.

The influx of money from higher lending rates also would allow banks to raise the low interest rates paid on savings, another change reform advocates say Beijing needs to make.