The liberalisation of interest rates is a major objective and an important component of the development of the financial system reforms in China. It will allow China to meet its WTO commitments, to actively promote the opening up of its finance market to the outside world and to have a system that is compatible with most other countries. The implementation of market-oriented reforms towards interest rates by rural credit co-operatives (RCCs) will require considerable adjustments to agricultural and rural development policies, and will transform external environment for agriculture and rural areas, thus creating conditions for a rise informers' incomes. It is important to correctly recognise the links between the liberalisation of interest rates and raising peasants' incomes, to objectively assess the progress of the market reform of RCCs' interest rates, and to explore the basic concepts of interest rate policy adjustments for agricultural loans under the principles of market economy. Such understanding will contribute to the full realisation of a prosperous rural society, to the unified planning of urban and rural socio-economic development and to the alleviation of difficulties in the provision of loans for agriculture and farmers.
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