A Study On The Transformational Development Of China’s Commercial Bank In The Process Of Interest Rate Marketization

China’s interest rate reform is approaching its aim of market-orientedliberalization, making a change in interest rate deciding manner, shaping commercialbank’s profit channels, thus rebuilding commercial bank’s balance sheet structure. Inthe long term, the reform can establish a financial market order, eliminate influencefrom government, and lead China’s banking industry to a healthier and competitiveway. This paper devotes an empirical and comparative analysis on this topic, based onstudies on China’s reform in its inter-bank market, securities market, foreignexchange market, and deposit and loan market since1990’s as well as internationalpractice in the U.S., Latin America and Asian countries. The paper discusses theimpact of the interest rate liberalization to China’s commercial banks, proposingstrategic suggestions including profitability, business structure, risk management andindustry analysis. Along with the process of interest rate liberalization, only the bankswhich can identify their market roles, propose definite business models, and selecttheir correct customers, can survive except some dominant systematically importantgiant players. The capacity of risk management, capital management, financialmanagement, and human resource management will become key indicators of acommercial bank’s core competitiveness.