Over the past eight years, China has taken a series of steady but swift steps to reform its currency regime. Its carefully calibrated approach has worked effectively to accommodate China's development stage and avoid a severe shock to the economy.

Many economists agree that the Chinese yuan is now much closer to an equilibrium rate. That is a positive testimony to China's significant progress toward a freer yuan.

In addition, the rise of the yuan has eased China's trade and payment imbalance, with current account surplus falling from about 8 percent to nearly 2 percent of GDP, and foreign exchange reserve growth hitting a nine-year low in 2012.

China's financial reform cannot be done overnight; yet it has no way back. The central bank has removed controls on bank lending rates on Saturday, a milestone in financial reforms. More reform measures are expected to follow in the coming months.

China's economic reform is a colossal and comprehensive project. No reform policy in the financial sector can succeed without bold changes in other sectors such as land, state monopoly, and fiscal policies. A blossoming real economy will serve as a strong backing for deeper financial reforms.