Analysis:

Interest rates in China have been adjusted eight times since 1996. By analyzing the term structure of interest rate in China in recent nine years, we can find that the term structure of interest rate in China is seriously mismatched.

As can be seen from the following set of data, the term trend of deposit and loan interest rates is gradually flat. As a decisive factor in determining interest rates, term is playing an increasingly weak role. The sensitivity of interest rates to term can affect the source and application of funds, and also have a great impact on residents, banks, enterprises and national macro-control.

Residents hold money for consumption, and their willingness to save is not strong. At present, the one-year deposit rate of this bank is 1.98%. Considering the interest income tax of 20% and the price increase, the effective interest rate is-1.6 16% (i.e. 1.98% × 0.8-3.2%). In addition, the difference between demand deposit and one-year and five-year interest rates is 1.26 and 2.02 percentage points respectively, and the term part of interest rate fails to make up for inflation, opportunity cost and other factors. Residents' long-term savings can not only preserve and increase value, but may even be damaged by inflation and other factors, so long-term deposits are not attractive to residents. If this situation continues, most residents will choose other investment channels or deposit them in current accounts to wait for new investment opportunities. According to the statistics of the central bank, there have been obvious signs of diversion of savings deposits in recent months. At present, China's capital market is in a downturn. Once the market picks up and the investment varieties increase, it will play a greater role in diverting residents' savings deposits.

Bank liquidity is insufficient, and the term of deposit and loan is mismatched. According to the monetary policy implementation report of the central bank in the first quarter of 2004, the balance of local and foreign currency loans of financial institutions at the end of March was 17.9 trillion yuan, of which the balance of short-term loans was174 billion yuan and the balance of medium-and long-term loans was 7 16 trillion yuan. The balance of local and foreign currency savings of residents in the same period was 1 1.87 trillion yuan. Excluding the statutory deposit reserve of 7.5% and the excess deposit reserve of about 4%, the savings that commercial banks can use for lending are only 10.5 trillion yuan. According to the statistics of the central bank, the proportion of demand deposits and time deposits is 34.23% and 65.76% respectively (while the proportion in 1999 is 24.5% and 75.4% respectively), which means that the balance of time deposits is only 6.9 1 trillion yuan, which is 250 billion yuan less than the balance of medium and long-term loans. This shows that the sensitivity gap of bank interest rate term is seriously unbalanced, and the medium and long-term loans of banks are supported by short-term funds. Once the bank's monetary policy is tightened, residents get new investment opportunities, or the risk of bank loans increases, resulting in a large number of non-performing assets, banks will face liquidity risks, which may lead to bank losses, bankruptcy, bankruptcy risks and even financial risks.

The strong investment demand of enterprises leads to overheating of the economy. Because the loan interest rate for less than 6 months is 0.72 percentage points different from that for more than 5 years, for enterprises, striving for medium and long-term loans can reduce the pressure of repayment of funds and expand the scope of use of funds. For enterprises, there is an impulse to expand production, so going to projects, setting up stalls and engaging in infrastructure construction have become the main places for loans. In the first quarter of this year, financial institutions actually increased loans by 83,565.438 billion yuan, accounting for 32% of the expected target of 2.6 trillion yuan for the whole year, an increase of 24.7 billion yuan. Among them, short-term loans are less, medium and long-term loans such as infrastructure loans continue to increase, and infrastructure loans increased by 654.38 billion yuan, an increase of 33.7 billion yuan year-on-year. Other medium-and long-term loans increased by 654.38+0887 billion yuan, an increase of 36.2 billion yuan year-on-year. Since 1998, the proportion of medium and long-term loans has been increasing. At the end of March 2004, medium and long-term loans of financial institutions accounted for 40% of all loans, an increase of 20 percentage points over the end of 1997. Because most of the medium and long-term loans of enterprises are invested in fixed assets or infrastructure construction, some industries have become overheated, such as steel industry, cement industry, electrolytic aluminum and other industries. The excessive growth of these industries, on the one hand, leads to unstable economic operation and local overheating, on the other hand, it also leads to high energy consumption in China.

There is not much room for state regulation, and there is great pressure to raise interest rates. As an interest rate serving the national macro-control, it mainly carries out structural adjustment, and generally does not move interest rates unless absolutely necessary. In addition, the "spread" should be considered when determining the interest rate trend. At present, the one-year interest rate of RMB is 1.98%, and the domestic interest rate of USD is about 0.56%. If the interest rate is raised, it will undoubtedly put pressure on the appreciation of the RMB. A few days ago, the Federal Reserve raised interest rates, leaving some room for China to raise interest rates. However, because China has not yet established a market-oriented interest rate system, the changes of interest rates of deposits and loans in different periods have not yet formed a linkage trend. At present, the term structure of interest rates is flat, and there is little room for raising interest rates or lowering interest rates. Therefore, establishing a market-oriented interest rate system based on the benchmark interest rate has become the main method to solve the insensitivity of interest rate term structure.