China issued reform guidelines in July relating to its decade-old household registration (or hu kou) system.
Empirical research has shown that China (and the renminbi) is moving towards the so-called ‘impossible trinity’.
Beijing is allowing the pendulum to swing towards reform success rather than growth.
China is tackling the challenges of a new paradigm head-on, including a slowing economic growth and the need for further reform to rebalance the economy.
Interest-rate liberalisation will be crucial to the success of China’s broader financial reform ambitions.