The Renminbi (RMB), the currency of China, has realized partial
convertibility under capital account, and of the 43 capital trading
categories classified by the International Monetary Fund, about
half have no or very few restrictions, a senior official said
Monday.
At the opening of HSBC's 14th central bank annual meeting, Wei
Benhua, deputy director of the Chinese State Administration of
Foreign Exchange (SAFE), said it is the long-term goal of China's
reform of its foreign exchange (forex) to achieve complete
convertibility of the RMB.
In 1996, the RMB became convertible under current account, and
the opening of capital account is currently being advanced
progressively.
Wei said China established cross-border capital flow in both
directions, and trading volume under capital account has been
expanding rapidly.
Complete convertibility under capital account is an issue that
every country must face when its economy develops to a certain
point and begins to participate in world cooperation and
competition, he acknowledged. Especially when current account
trading is open, the controlling efficiency on capital flow will
decrease, and the opening of capital account has become inevitable
in joining the global economy.
According to Wei, the goal of the Chinese government is to ease
restrictions on cross-border capital trading activities in a
selective and step-by-step way while effectively preventing
financial risks, so as to gradually realize the convertibility of
RMB under capital account.
With the launch of new measures regarding capital flow, he
added, China's capital account will open further, so as to create
good conditions for cross-border capital flow and the development
of China's capital market.
(Xinhua News Agency November 9, 2004)