The latest official and market data monitored by China Confidential suggests that the depreciation of the renminbi against the US dollar seen so far this year has had a tangible impact on fund flows and market movements across a range of metrics, but remains broadly under the central bank’s control, with little sign of uncontrolled capital flight or investor panic. Weakening economic fundamentals and continued external uncertainty will continue to pose challenges in the coming months, however.

The reform agenda that was set out following the third plenum is set to be implemented unevenly and according to varied timescales. Here is our take.

Much hope for liberalisation attends the launch of the Shanghai Free Trade Zone, but the devil may be in the lack of detail.

Local commentators discuss whether plans for a new, enlarged free-trade zone in Shanghai will help the city to become a global financial centre.

Hot money inflows have been a major driver of the renminbi’s appreciation against the US dollar since the start of the year, prompting Beijing to tighten surveillance of the key unofficial channels through which this money is flowing.

China is ramping up momentum for a series of economic reforms to be unveiled at a key Communist Party meeting expected in October, government officials and domestic media reports say. We think the moves, which are taking place largely behind the scenes, present the strongest signal yet that President Xi Jinping’s leadership may yet emerge as a more reformist and purposeful administration than that of Hu Jintao over the last decade (CC Dec 20 2012 Macro View).

Credit and liquidity conditions should remain robust in 2013, but the rising popularity of alternative sources of financing poses increasing risks 

China’s new five-year plan for the financial sector pledges to push forward with the liberalisation of interest and exchange rates, as well as capital account convertibility