Liberal rates may be ready in 3 years

China may be able to achieve deposit rate liberalization in about three years, said a senior official at the Development Research Center under the State Council.

Chen Daofu, director of the Research Institute of Finance at the center, suggested that deposit and lending rates should be the focus of the interest rate liberalization.

In a commentary published by a magazine called Yingda Finance, which is published by the State Grid Co, Chen said China should be principled when raising the caps of deposit rates.

He suggested raising the cap on deposit rates from 10 percent to 20-30 percent in the near future. Additionally, the ceiling on rates for fixed deposits over three years can be lifted to 50 percent. The complete liberalization of deposit rates should be achieved between 2015 and 2016.

The liberalization of medium and long-term deposit rates should be prioritized over short-term rates.