Earlier this month, China’s leading-party bigwigs announced a package of economic reforms. Alongside assurances to change the one-child policy and alleviate harsh residency laws, a number of financial measures were promised. State-owned banks face competition from the private sector, interest rates will be deregulated and capital controls relaxed. On paper, the reforms should satisfy the most ardent exponent of free markets, but their practical consequences might be less welcome.

Wall Street’s reaction has been nothing short of euphoric. One sellside economist writes that the reform package had “met 100 per cent of our already extremely bullish expectations”. Another investment bank hails the “most ambitious top-down economic reform initiative in the history of the People’s Republic”.

The consensus appears to be that the introduction of market-based reforms will lift China’s economic growth potential while simultaneously reducing macroeconomic risk.