Linking the new loan prime rate to the medium-term lending facility rate is expected to bring down the LPR, leading to a decline in overall borrowing costs.
That already has some effect. On Tuesday, the first day of the new reforms, the new one-year loan prime rate was set at 4.25% — down from 4.31% previously; while the newly introduced five-year loan prime rate was fixed at 4.85% — below the five-year benchmark of 4.9%.Beijing has for many years tried to change the way interest rates work in its economy.
China maintains a so-called command economy — or a centrally planned economy, where its central bank dictates where interest rates for bank loans and deposits should be. But as the Chinese economy opens up and increasingly plugs into the global marketplace, the PBOC has through the years given commercial lenders more leeway in setting rates.
The point? Get from under US thumb or need for the USA! Putin rubbing his hands
so ...fight debt with mode debt....