An Exploratory Study of Interest Rate Liberalization in Commercial Banks in China

China has been through the process of interest rate liberalization for more than a decade. Now China has removed the interest ceiling of deposit rates and entered the final stage of interest rate liberalization. Bank as a key component of financial institutions faces challenges as well as opportunities through the process. This article discusses about the impact of interest rate liberalization on commercial banks in China and corresponding suggestions to improve banks’ performance, involving aspects such as business structure and market share of banks. The article first introduces the related theorem of interest rate liberalization and the process in China, then focuses on its effect on commercial banks in China by collecting and analyzing the data to test the hypothesis. Also based on the statistical analysis, suggestions about the strategy for commercial banks are proposed.