Cash & Liquidity Management

China’s interest rate liberalisation: Why investors will need a keener focus on credit and risk analysis in a challenging new terrain

Published: Apr 2016
J.P. Morgan Asset Management Thought for the Month – building stronger liquidity strategies – let's solve it.

April 2016

The Chinese government is committed to further financial sector reform, believing that market-driven interest rates and profit-minded institutions are central pillars of efficient capital allocation and continued economic growth. But the next phase of reform, full interest rate liberalisation, will present fresh challenges. The government, regulators and banks will all look to strike a balance between free markets and government control, aiming to spur economic growth while restraining unhealthy financial risk.

Despite the various obstacles and complications, two powerful forces are at work: the government’s push to create a sustainable domestic growth model and the desire of investors to benefit from the higher yields of liberalised markets. Together they demonstrate China’s aspiration for more market-driven interest rates, better access to capital and greater investment choice.

To find out more, download our white paper, China: The path to interest rate liberalisation. You can also download other Liquidity Insights from our J.P. Morgan Global Liquidity website With its user-friendly navigation, you’ll find a seamless connection between liquidity investment solutions and our best thinking, which can help you meet your goals in today’s complex investing environment.

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