China moves towards loosening interest rates

<p>China is liberalising its financial sector.</p>

Speculation is growing that China could soon loosen its interest rates, after the Asian nation confirmed it is liberating its financial sector.

Banks will be allowed to trade deposits with each other from today (December 9th), as China looks to be more open in its banking industry.

A report by China's state-owned Xinhua news agency said the move "will allow banks to borrow at more stable costs in the interbank market".

This comes only a few weeks after China announced the launch of a free-trade zone in Shanghai where controls on key sectors will be eased.

British prime minister David Cameron recently visited China to try to set up new trade deals and the Asian nation is becoming more open to negotiations with other countries.

China's move to liberalise the financial sector may be partly as a result of the slowing economic growth seen by the country in recent months.

The nation also recently announced it is funding a new joint venture between Renault and Dongfeng Motor Group in its latest move into the auto manufacturing sector.

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