Since the start of the global financial crisis and the emergence of regional trade alliances in the global economy, “a currency swap network” has emerged in financial and monetary fields.

The decision of China’s central bank to pursue “directional drop quasi” means a reduction of the reserve requirement ratio, support will be given to the development of agriculture and small businesses, and there will be more regulation of China’s financial market. However, this quantitative policy instrument will be limited in its ability to enhance services for the real economy.

The RMB exchange rate should gradually reform with less government interference, writes Yi Xianrong.

China’s central bank will not change its monetary policy in the near future, but will rather keep a steady but tight policy to get both credit and monetary growth back on track. This could be the keynote of China central bank monetary policy for 2014, writes Yi XIanrong.

Although in 2014, it appears China will be adhering to a “prudent” monetary policy and working to balance its finances, the world’s number two economy will still face considerable challenges, such as rising credit and an appreciating currency.

While much of the world has focused on the US Federal Reserve’s phasing out of quantitative easing, more significant economic news came out of China’s interbank market. As Michael Justin Lee explains, China’s year-end liquidity squeeze has implications for the global economy and deserves more attention.

China needs to review its liberalization financial policies, especially the pace of the liberalization of capital accounts, writes Zhang Monan. 2014’s changing global currency financial environment may bring huge risk premiums to China.

The success of the Third Plenum’s recently announced economic reforms rely heavily on the outcome of China’s financial sector reforms. Important topics to monitor, writes Yi Xianrong, include interest rate liberalization, stock market regulation, changes to the exchange rate regime, and the risk that these reforms entail.

As the proposed free trade zone is about to take off in Shanghai, the megacity’s growth will accelerate, China’s financial reforms will speed up and the competitive impact will be felt in Hong Kong and Singapore, as well as in New York City and London.

The recent publication of Visa’s International Financial Literacy Barometer has sparked interest in the United States’ mature financial sector and China’s still-developing financial markets. Noting the low ranking of China and Hong Kong, Michael Justin Lee explains that being financially literate will not only help Asia’s young finance sector boon, but will also improve the world’s future economic outlook.