China Rewrites Rulebook on Capital Flows After Crisis Lessons

Since global capital was set free following the end of the Bretton Woods system in the 1970s, countries have struggled to tame the consequences of unbridled money flows without walling off their economies.

Now China is trying to crack that code by essentially establishing two separate checkpoints for flows: one for foreigners and one for residents. It’s a big difference from the all-in capital-account liberalization that rich nations began embracing four decades ago and which later badly tripped up emerging markets -- as in the Asian financial crisis in the late 1990s.