How to Achieve Financial Reform in China

Excellent piece by Michael Pettis.

The most excellent case for free markets is China’s heavily controlled financial system. It’s a showcase of how controlled markets tend to exacerbate wealth inequalities and create an economy based around political connections. In essence, government control does not result in more freedom or equality; it results in just the reverse in most cases.  Moreover, by promoting dramatic misallocations of resources, it also destroys or at least hinders overall growth of societal wealth.