Executive Summary

China’s capital markets have developed at a pace that has few parallels in history. In some sectors of the financial industry, such as digital payments, China today sets an example for the rest of the world.

Other recent examples of impressive progress are the dramatic opening of the Chinese Interbank Bond Market (CIBM) to a wide range of international investors under accommodative conditions in early 2016; the introduction of registration systems for the Qualified Foreign Institutional Investor (QFII) and RMB QFII (RQFII) programmes, replacing the slow and less transparent quota application system; the Stock Connect scheme, unique in design yet operating smoothly for over two years; the upgrading of the China Foreign Exchange Trading System (CFETS) foreign exchange platform, which could bring FX trading in China on a par that of developed markets. Such examples hint at the potential for China’s financial markets to transform themselves and adapt to the requirements of a growing economy and an ever-more sophisticated populace.

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