The Interest Rate Market, The Benchmark Rate Choices And Decisions

In the over twenty year's course of Chinese economic reform, many experiences have been made to benefit the reform of interest rate liberalization such as the center bank has loosed the control to interest gradually the microeconomic units are more sensitive to the interest, the sub-markets of financial market are rebuilt and refined to reflect more effectively the relationship between capital demand and capital supply etc. China has been in the proper conditions to build a system in which the basic interest rate and interest rate of market are determined by the relationship between capital demand and capital supply. Therefore, it's rather difficult to bring the interest rate liberalization into Chinese financial system.The reform of interest rate liberalization is to build a system which is based on the interest rate of center bank, appeared through the medium of interest rate of currency market, and the interest rate of deposit and loan in the demand and supply of the market. One of the key factors in to find the proper basic interest rate, and to build a system with reasonable interest rate of market on the basis of basic interest rate. The most proper basic interest rate is the interest rate of government bonds. This paper, form the angle of the relationship between interest rate liberalization and government bonds market, analyzes the various obstacles to make the interest rate of government bonds to basic interest rate and points out the essential factor to sent back the reform of interest rate is lack of the effective basic interest rate.This paper, in the background of developing reform of financial system in China, want to find the way which leads to interest rate liberalization. Guided by the Marxism economic theory and combined the relevant knowledge of western economics and modern financial theory, by adopting the complicated methods of theoretic and practical analysis, systematic and practical analysis, systematic and comparative analysis, quantitative qualitative analysis by focusing on the topic "basic interest rate" on the basis of the relationship of interest rate liberalization and basic interest rate to analyze in the logic clue of "interest rate liberalization-basic interest rate-interest rate of government bonds-development of government bonds market", to research deeply the reform of interest rate liberalization, to conclude the achievements and problems in interest rate liberalization ,to propose some strategies and suggestions ofpromoting interest rate of government bonds to become basic interest rate by developing government bonds market.