PBOC notes suggest slow going for interest rate liberalization in China

Last week saw three essays by department heads at the People’s Bank of China highlight the central bank’s focus on replacing its old lending cap with a new policy benchmark interest rate, suggesting China is still grappling with the transition away from frequent open-market operations it has historically used to implement monetary policies, South China Morning Post reported. Analyst reaction was mixed, with Chen Xingdong, China chief economist at BNP Paribas, suggesting that “China’s banks’ pricing power against corporates are still relatively low. You can’t get a man to run after having him tied up for years.”