Instead, it happened rather organically as a result of market forces in an open system. China has been gradually moving in this direction, but the process of opening up has its challenges. Two of these are worth pointing out. The first is managing the volatility in capital flows that can be associated with a more open capital account.
The second is managing the implications for global markets and investment patterns. The first of the challenges is one that faces any country moving from a highly constrained system to a more liberal system. As the constraints are lifted, people adjust their portfolios in ways they previously could not.