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China's Stock and Bond Connect a sign of reform

From a macroeconomic perspective, Bond Connect is another tool for China to pursue its asymmetric capital-account liberalisation, which will remain the medium-term strategy, says the writer.

CHINA launched the Bond Connect scheme on July 3, two weeks after MSCI announced (on June 20) that it would add 222 large-cap Chinese domestic stocks to its benchmark Emerging Markets Index (EM Index). Both events followed the inclusion of the renminbi in the International Monetary Fund's...