Liquidity is critical for commercial bank's health. After reviewing the evolution of China's banking sector liquidity regulation, this research investigates the liquidity risk characteristics of China's banking sector and its influencing factors. In addition, this research also investigates the characteristics of the two new liquidity ratios, i.e., liquidity coverage ratio (LCR) and net stable funding ratio (NSFR), and their impact. Some recommendations to improve China's banking sector liquidity regulation are made in the last part.