How close is China to driving financial reform and opening up its markets? Perhaps the answer lies not with the country's new leaders, who are being watched closely for their willingness to bring reforms, but with Beijing technocrats who appear to be pushing ahead with change.
Guo Shuqing, the chairman of the China Securities Regulatory Commission, caused much excitement last week when he suggested that this year could bring sweeping new measures to open up financial markets in the world's second biggest economy.
Foreign investors hold about 1.5 percent of the local share market's value and China could increase this by "10 times," Guo said in comments that sparked a 3 percent jump in the Shanghai stock index.
"We are seeing a real transformation of China opening up its capital account, which means that investment dollars should be able to flow freely into China and out of China," Aaron Boesky, CEO at Marco Polo Pure Asset Management told CNBC. "The most glaring and prominent announcement that's been made in the last few months regarding the capital account was the comment from Guo Shuqing."
Last year, Guo led a move that more than doubled the amount of Chinese shares foreign investors could own, lifting the quota for qualified foreign institutional investors (QFII) to $80 billion from $30 billion.
"People say the (latest) remarks are too aggressive. If you look at prior to 2012, the amount of the QFII quota ranged by $1.5 to $2 billion a year, for 2012 it was $15 billion, so that was a rise of ten times. So for us it would be dangerous to ignore these comments," said Peter Alexander, managing director at China investment advisory Z-Ben in Shanghai.
"What is critical is the direction, how quickly will it be rolled out. From a broader perspective, we think what is happening right now, not just with QFII, is significant and we think a lot more (measures) will be coming out and they relate to the opening up of the renminbi," he added, referring to the Chinese currency.
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Marco Polo Pure Asset Management's Boesky said it was worth watching Guo closely.
"Guo Shuqing is a rising star in terms of Chinese economics. He's probably going to become the head of the PBOC (People's Bank of China) in the next few months," Boesky said.
"He's going to become the Fed chairman of China. So if he's saying that he wants to expand it (foreign investment in Chinese shares) by 10 times then I would say that it's probably a good bet that that's going to happen," he said.
China's central bank chief Zhou Xiaochuan is expected to step down later this year. And a priority for his successor is likely to be the further liberalization of China's interest-rate regime, which analysts say is at the heart of China's financial reforms.
"I've heard the same thing about Guo being named the next central bank chief. But keep in mind that the central bank is not an independent body in China, it reports to the government," said Patrick Chovanec, Associate Professor at China's Tsinghua University, cautioning that while China's technocrats can suggest changes, big policy moves will be made by China's leading politicians.
"They (the technocrats) can push in certain directions and argue the case why certain things are important, but anything that's going to be a game changer, that decision is going to have to come from the top," he said.
Alistair Chan, an economist at Moody's Analytics in Sydney, added that the comments by the securities regulator also needed to be seen in the context of a weak stock market and numerous efforts to boost the appeal of Chinese shares.
The Shanghai stock index was one of the world's worst performing share markets last year, gaining about 3 percent compared with 13 percent rise in the S&P 500 index and double-digit gains in most major Asian bourses.
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"Underlying this, there is a drive for reform and an understanding that financial markets need to reform and need to change, so I think there will be a lot of measures that will boost productivity in the financial sector. One of them will be to encourage foreign investors to come in," Chan added.
In a sign that a broader push for reform is taking place, outgoing Premier Wen Jiabao was quoted as saying on state radio on Monday that China will push forward market-based reforms on interest rate systems and the currency regime.
Reforming China's financial sector, seen as key for sustaining long-term economic growth, is expected to be a top priority for China's new leadership, which takes over in March following a transition period that began last November. They will lead China for the next 10 years.
"More opening up and liberalization should be in store," said Z-Ben's Alexander. "And that opening up should come from across the spectrum, the securities regulator, the insurance regulator, the banking regulator. It will be a broad-based effort."