Research On The Reform Of The Interest Rate Marketability In China

Since 1990's, the designers of China's reform have regarded the foundation of the socialist market-oriented economy as our goal. Under the circumstances, the financial reform, which has made a great progress and still has many problems to be solved, has been put on the agenda. Maybe one of the most important and desperate problems will be the interest rate marketability reform. Nowadays, most of the experts in the circle have drawn a conclusion that deepening the interest rate marketability reform should the key point to the core of China's financial reform.Generally speaking, the interest rate marketability means a multi-functional interest rate operation mechanism, in which the central bank refers to the price signal of the monetary market as well as demand of the ultimate purpose of the monetary policy, only controls the basic rate on one hand, liberates other kinds of rate that should be commanded by the supply-demand relation in the market on the other hand. According to the situations in China, the reform needs not only the guide of the appropriate theory, but also the experience from other nations. So, by comparing several prevailing interest rate theory and summarizing the general experience, the paper presents the point of view and suggestions on the China's interest rate marketability reform.Complying with the train of thought, the paper is organized as follows:Chapter I : Introduction. The section presents the definition of the interest rate marketability and introduces the subject to be discussed. Chapter II:Introductions and remark on the interest rate theories. The section focuses on the analysis of the several classic rate theories in the western economics and view in Marxism theory. With the following comparing among them, it concludes that the latter could apply to China's reform relatively. Chapter III: Summery of the general experience in the worldwide. This section briefly states that process of the reform in other nations or regions that has undertaken or completed the reform. On the base of the statements, some key experience that could lead the reform to be successful has been summarized at the end of the chapter. Chapter IV:Review on the procedure of China's interest rate reform and the necessity analysis on the reform. This part reviews the typical characteristics and measures taken in different periods from 1949. Further more, it ends in the necessity analysis based on the current situation. Chapter V: Research on the conditions and blueprint to China's interest rate reform. Firstly, the section points out that the basic conditions approaches and principles of the reform with the references to the above sections. After that, two important questions that should be cleared, i.e. how to harmonize the contradiction between Endogenous and Exogenous originated from the interest rate and what order the reform should take, have been discussed. The conclusion is that China's interest rate marketability reform should be undergone step by step according to the different level and inherence. Finally, the paper lets out the relative measures we should take so as to stimulate the development of the reform.