It's time to end alchemy of cheap money

After a year-long pause, the US Federal Reserve finally raised interest rates on Thursday. The glacial pace at which the Fed raises interest rates is no cause for optimism. And although the increasing disruption US president-elect Donald Trump is expected to cause around the world should make such a cautious approach a virtue, its underpinning illusion that cheap money can save the world economy from the dire consequences of the global financial crisis, which spread from the United States in 2008, has long impeded painful but necessary structural reforms.

If the world economy is to get back on the track of sustainable and inclusive growth, policymakers across the world have to take concrete measures to replace pain-killing cheap money with pro-growth structural reforms as quickly as possible. So, the way the US and China, as the world's two largest economies, will lead by example in pioneering new growth patterns will largely shape the future of the world economy.

With all three major US stock indexes hitting record highs recently and the Dow very close to the magical 20,000 mark, investors had made fairly clear their expectation of an interest rate hike, only the second in a decade.