China's recent eclipsing of Japan as the world's second-largest economy didn't come as a big surprise. But now that the country has reached that milestone, the government policies that spurred that impressive growth are in urgent need of reform, say finance and economics experts. That includes the government's iron grip on the country's interest rates. While China's low lending rates are a boon to banks and the state-owned enterprises receiving their loans, Chinese households are being done in by the rock-bottom rates received for their savings accounts. But reforming the system to encourage more fair and efficient market-based lending is an uphill battle.

China has been on a roll lately in announcing currency and financial reforms. In June, the country’s central bank said that the renminbi (RMB) would move in value against the U.S. dollar, albeit in a managed floating rate regime. In August, it put in play a pilot program in Hong Kong allowing RMB deposits held offshore to be invested in mainland bond markets. And soon, it said, such offshore deposits would be eligible for investment in domestic stocks.  Do these reforms amount to a “big bang” in the making – a major turning point in currency liberalization and the opening of financial markets? Or is there less here than meets the eye?

Despite the diplomatic and military twists and turns between China and the island of Taiwan, the two countries are fast becoming virtually one in the vital field of information technology. The full extent of this collaboration already is stunning: Taiwanese factories on the mainland make more than 85% of the monitors for the world’s desktop computers, for example, and more than 90% of all laptop computers. China Knowledge@Wharton looks at the pace – and the challenges – of this rapidly evolving economic integration.

Following final approval of the sweeping Dodd-Frank Wall Street Reform and Consumer Protection Act on July 15, Obama administration officials have been addressing audiences across the country to explain how and under what timetable they plan to implement the law’s broad intentions. In separate speeches at Wharton in August, Neal Wolin, deputy secretary of the U.S. Department of the Treasury, and Diana Farrell, deputy director of the National Economic Council, outlined the administration’s plans to protect against some of the risks that led to the global financial crisis. Knowledge@Wharton offers coverage of their speeches, along with faculty members' perspectives on what the new legislation will mean for the U.S. economy.

What inspires an employee to work harder? More money, more often than not. But what about being benchmarked against peers, asks Wharton management professor Iwan Barankay in a new study titled, "Rankings and Social Tournaments: Evidence from a Field Experiment." With the help of a "crowd-sourcing" website, Barankay set out to discover not only whether workers are interested in how they rank against their peers, but also what happens to their performance if they find out how they placed. His conclusion may leave companies thinking twice about the best way to appraise staff performance.

In the current economic climate, many executives are tempted to change strategies quickly or reinvent their company in hopes of finding a new model to weather the downturn. For UPS CEO Scott Davis, however, leadership during the "Great Recession" has meant staying the course. Davis told the audience at the recent Wharton Leadership Conference that his strategy for surviving the last two years involved sticking to the company's core values of integrity and partnership.