Mega Financial Reform, Drop by Drop

The National Development and Reform Commission announced that foreign banks will be allowed to bring in US$ 24 billion in borrowed funds into China in 2012. This helps address a potential short-run problem of concerns about capital outflows, but it is part of a much larger trend of substantial financial reforms visible over the past 5 months. In the fall of last year, the top leadership of the China's securities, banking, and insurance regulators were changed. The most important personnel switch was to replace CSRC commisioner Shang Fulin with Guo Shuqing. Shang was moved over to head the banking regulatory commission, replacing retiring Liu Mingkang. Zhou Xiaochuan, who will likely conclude his tenure as Governor of the People's Bank of China next March, has also continued to sound reformist.