China: The Limits to Liberalisation

EDITOR'S PERSPECTIVE

Keen to be Number One

Graham Buck 22 July

 

Back in 1976 America celebrated its bicentennial, while in China the era of Mao Tse-Tung, founder of the People's Republic, ended with his death on 9 September that year and an ensuing power struggle. At the time, the prospect of China usurping the US within four decades as the leading world economic power would have seemed fanciful to many. However the rate of economic expansion has been so great that today a growth rate of 'only' 7.5% represents a significant cooling-off. In this week's gtnews focus on China's process of economic liberalisation, Dr Jianzhong Yao of Asia Capital provides an in-depth study on the opening up of the country's insurance and reinsurance markets, with the new solvency regime likely to free up as much as US$6.4bn in capital. Kevin Lester and Jeremy Wang of Validus Risk Management examine the strength of the Chinese renminbi (RMB) since the currency de-pegged from the US dollar in 2005 and ask whether the recent weakness is merely a blip. Elsewhere, Voith's Gerald Boehm describes how the German multinational undertook a two-year upgrade of the technology supporting its worldwide guarantee and trade finance business, while we return to the topic of the Bank Payment Obligation (BPO), which Olivier Spitz of UniCredit suggests could soon be rivalling traditional Letters of Credit in popularity.

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