My Op-ed article in the South China Morning Post on 22 July, 2013.

"The task of reform is herculean and by no means certain of success.
Bumpy rides are to be expected. Yet the emergence of China as the
world’s largest economy with a more mature financial market and a fully
convertible currency is an exciting prospect, with as many tantalising
opportunities as risks".

Download SCMP Op-ed article on INSIGHT 22 July, 2013

Afterword – The Op-ed opens with a reference to the risks posed by dubious Wealth Management Products (WMPs) of China's shadow banking system. The rise of these WMPs is due to the "finanial repression" of capped banks' deposit interest-rates. Local governments use the shadow banking sector to raise "off-balance-sheet" funds through WMPs offering much higher interest rates. This unhealthy development is unlikely to be resovled by administrative fiats alone. The ultimate solution is a complete liberalization of interest rates. This is likely to coinside with the full convertibility of the RMB, probaly by 2020 if all goes well, according to my SCMP Op-ed.

A good summary of China's shadow banking system is The Economist article "China's shadow banks – The credit kulaks" of 1 June, 2013

Perhaps as a quick reprieve during the current economic slowdown, China has since moved swiftly to reform, at least, partially, the financial system so that credits can be more readily available to businesses especially SMEs. On 20th July, the People’s Bank of China (PBOC), the country’s central bank, announced the immediate abolition of all restrictions on lending interest rates, enabling China’s banks to set those rates as they see fit. Commercial lending rates were previously set at 70% of the PBOC’s benchmark lending rate. Removing this lending rate floor is intended to spur competition among banks and lending to the corporate sector.