China will press on with financial reform and opening

Subject

Financial reform and opening in China.

Significance

Despite trade disputes with the United States and risks in emerging markets, China's leaders are showing determination to open the country's financial sector further to foreign businesses.

Impacts

• Local governments and banks will come under pressure from waves of corporate defaults, but wider panic is unlikely.
• Struggling enterprises will be less able to rely on debt to survive.
• The strong supervision of the financial sector seen in 2017 will persist as the authorities seek to reduce systemic risk.
• The precise timeline given by the central bank shows policymakers' confidence that risks are adequately contained.