| The long haul across capital-intensive growth in China will gradually come to an end. As a “silent revolution”, the financial reform taking place is laying the foundations for a modern market economy, in which the efficient allocation of capital should ensure a steady growth rate. Supported by accumulated savings and current regulatory reforms, this transformation entails new responsibilities for the State and the need for a social security setting up the mutual sharing of economic and social risks. The development of corporate bond markets and the diversification of external finance for the business sector are conditional on the emergence of a broad and liquid public bond market. Its supply will arise from public expenses, and its demand from the growth of powerful institutional investors. |
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