RMB's full convertibility 'long-term target'
(Xinhua)
Updated: 2004-07-05 17:08

China's State Administration of Foreign Exchange (SAFE) senior official said Monday the full convertibility of Renminbi (RMB) under capital accounts is the "long-term target" in the reform of China's foreign exchange (forex) management system.

"The process is being pushed forward in an active and orderly manner," said Wei Benhua, the SAFE deputy chief.

He acknowledged that the forex regulator, when fulfilling the yuan's full convertibility, would proceed from China's specific conditions and draw on international experience and put in place relevant measures in a steady and selective way.

The liberalization of capital accounts would target capital inflow, flow of long-term capital, financial institutions and capital transactions on the basis of real trade, in advance of capital outflow, flow of short-term capital, non-financial institutions and residents and transactions with no real trade behind them, noted Wei.

By late April, China had approved approximately 480,000 foreign-funded projects, using direct foreign investment (FDI) totaling about US$520 billion. It had issued shares overseas collecting US$28 billion and B-shares on domestic stock bourses netting US$5 billion in foreign currencies.

On the outgoing side, nearly 7,700 non-financial businesses made their presence in the global market involving combined pledged investment of 12 billion dollars by April. In 2003, China reported capital account transactions reaching US$386.5 billion, a 43-fold increase from two decades ago.

The Chinese currency already became fully convertible in 1996 under the current accounts, which tracked trade, income from investments and overseas workers, and one-way transfers such as foreign aid.

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