1 The External Reform in China Mainland: Historical Review and Future Direction*

After nearly 30 year’s openness and reform, China is at another turn point of further reform. In this paper, the author dress on the external part of the reforms mainly. We firstly give a brief introduction of the formation of China’s external strategy. According to the performance of China’s external strategy, we point out the mismatching in China’s external reforms then. After analysis on the existed system, we discuss possible reforms in the future. We discuss the possible path and timing for further external reform in China according to the current performance and future risk. Based on these, we think the first step for the government is to encourage capital outflow and pursuer higher margin for China’s foreign asset. Then, provide more portfolio choice in domestic by developing a deeply-intensified capital market, and liberalize the price for Chinese Yuan in domestic and overseas. Finally, China can liberalize capital account and allow currency convertibility at proper timing. At the end of this paper, we point out possible policy in public governance for th