It's just the same as with your therapist: the more you open up, the harder it is to stop. Opening up the economy led to 9%= GDP growth for decades, a golden era of prosperity. Anyone grateful? Nope. That growth must continue at all costs.
So now financial markets must open up to the world. Never ones for drastic action, no matter the circumstances, the Chinese government is launching a Shanghai zone wherein the yuan will be fully free for investment inflows and outflows, a test run. Do we want growth badly enough to be open about our capital account?
"Let's not hold our breath for an open capital account," says Jimmie Jeremejev."But as far as spurring a new wave of growth by encouraging FDI in China's financial markets, there is a lot of going on. Most attractive are the new streamlined QFLP and QFII legislation, which not only opens up a world of new financial products available to foreign investors, but also makes possible tax-free repatriation of profits. For example, we're seeing more and more interest in access to China's A-Shares."