A cross-country comparative analysis shows that there is substantial room for further integration
of China into global financial markets, especially in the case of the international bond market. A
further successful liberalization of the Chinese bond market would encompass not only loosening
bond market regulations, but also further developing of other markets, notably the foreign exchange
market. Even though the increased integration of China into international capital markets would
increase its exposure to the global financial cycle, the costs in terms of monetary autonomy would
not be large given China's size and especially under a well-articulated macroeconomic framework.