China Ready to Promote Floating Interest Rates: Official

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Last updated at: (Beijing Time) Sunday, March 30, 2003

China Ready to Promote Floating Interest Rates: Official

China is facing its best ever opportunity to promote market-oriented interest rates, a senior Chinese official has told a forum on the development of the finance market.

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China is facing its best ever opportunity to promote market-oriented interest rates, a senior Chinese official has told a forum on the development of the finance market.

In the current finance markets, especially currency markets, capital prices depended on supply and demand balance, which mainly consisted of financing costs, risk and reasonable profits, said Dai Xianglong, mayor of north China's Tianjin Municipality and former governor of the People's Bank of China.

By the end of 2002, China had raised a total of 680 billion of US dollars through foreign direct investment, overseas listing of domestic enterprises and borrowing from abroad, said Dai.

Chinese currency capital was also sufficient as China's saving rate by the end of 2002 had reached 39 percent and the money deposited by financial institutions in the central bank was 6.7 percent more than required.

The current interest rates were the lowest in history and interest payments took only 4 percent to 5 percent of the sales costs of industrial and commercial enterprises, said Dai.

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