Connect scheme for gold shines light on China’s financial liberalisation

When Hong Kong launched its latest Connect programme on July 7, most of the attention focused on gold. That misses the bigger story. Delivery Connect, part of the city’s new gold clearing and settlement system, is not simply another financial initiative but the latest evidence that Beijing has settled on a distinctive model for opening up China’s financial markets.Rather than embracing wholesale financial liberalisation, China is steadily integrating with global markets through carefully designed cross-border channels, with Hong Kong serving as the indispensable bridge. Delivery Connect shows the Connect model has evolved from a series of isolated reforms into the blueprint for China’s financial opening-up.It marks a significant departure from the path followed by many emerging economies over the past three decades. financial liberalisation was once associated with sweeping deregulation, rapid capital account opening and unrestricted capital flows. China has consistently rejected that model.