Impossible trinity in China -- Opening a can of worms -- Betting on the role of the state -- Incentive problem standing in the way -- Power struggle or genuine reform -- From financial repression to liberalisation -- Monetary policy reform fraught with risks -- Systemic risk (I): shadow banks...

This paper reviews the steps that China has taken towards financial reform with a particular focus on capital account liberalisation and internationalisation of the use of the renminbi. After a slowdown in reform momentum during the global financial crisis, there is a clear push towards reform,...