China has launched a trial program allowing a limited number of banks to independently set deposit rates, Reuters reported, citing state media. Some city commercial banks and China Merchants Bank (CMB; 600036.SH), will compete for large deposits through a competitive bidding system through the trial, marking a break from current policy, which sets limits on both deposit and lending rates. These limits were previously waived for large deposits invested for longer than five years. The trial reflects ongoing statements by the People’s Bank of China (PBoC) that it would gradually move to a more market-based system for rate setting. Late last year, PBoC Governor Zhou Xiaochuan said that over the next few years there would be "noticeable progress" in liberalizing interest rates.