China’s gradual relaxation of controls on its currency is playing out like a vast financial striptease, enticing bankers, companies and investors alike.
Treasurers can now use renminbi to settle trade deals and bankers enjoy greater access to the domestic bond market. These developments are most welcome, to be sure, but the authorities in mainland China are still keeping a tight grip on currency reform through the judicious use of regulations, quotas and caps, fearful of the twin menace of inflation and speculation. As a result, the market has been left tantalised and panting for more.
Patience will be needed. As Lisa Robins, head of treasury and securities services, China, J.P. Morgan, pointed out,...
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