While the journey is clearly a gradual one, I suspect that over the years ahead, the further liberalisation of the Chinese capital account could turn out to be one of the really significant events in global capital markets.
To date, much of the capital outflow from China has been intermediated – indirectly – by the People’s Bank of China through its intervention in the foreign exchange market and its accumulation of over $ trillion of foreign reserves. At some point, as controls on capital outflows are lifted, this model is likely to change.