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The government sets deposit and minimum lending rates, giving banks a guaranteed margin of about 3.5 percent. It has begun allowing lenders to charge more for some commercial loans, which has increased profit margins still further. The World Bank and the Chinese government's own researchers have added to calls for reform, warning economic growth could slow sharply unless banks become more efficient and lend more to support the dynamic private sector. The government has repeatedly promised over the past decade to make banks more market-oriented and to pay higher deposit rates but has yet to make major changes. Analysts expect little progress for at least another year until a once-a-decade transfer of power to a younger generation of leaders is complete in early 2013. Wen was seen as a reformer with the public's interests at heart when he became premier in 2003. But change has been slow and entrepreneurs and foreign businesses complain Beijing has backtracked in some areas as it tries to build up dominant state-owned companies in industries from energy to banking. Wen, due to step down as premier in early 2013, apologized last month in a nationally televised news conference held at the end of China's annual legislative session for failing to move faster on reform.
[Associated
Press;
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