The Significance of Chinese Financial Market Liberalisation
The expression “new era” carries particular magnitude. Whenever a development comes along which promises to permanently alter the lives of many people, we speak of a new era. This is why there was good reason to prick our ears when the president of China, Xi Jinping, spoke of a new era recently. According to President Xi, one major element of this new era is that China is opening up—and he expressly included the financial markets. So it’s no surprise, then, that China’s central bank and finance ministry have been emitting clear signals in favour of more bidirectional financial flows. As a case in point, the foreign ownership limits in Chinese financial institutions have recently been relaxed, and the schemes to liberalise the cross-border capital flows have received further push by raised quotas.