The internationalization of China’s currency is proceeding hand in hand with the liberalization of the country’s capital markets. If China can surmount its short-term challenges, the impact of these reforms on global economies and markets should be profound. Of all China’s reforms, the one most likely to reverberate around the world is the liberalization of the country’s capital markets. In just a few years, it should lead to China’s bond and equity markets being incorporated into global indices, forcing a massive reweighting of portfolios as benchmark-observant investors reallocate assets to China just to stay market neutral. Read more