BEIJING May 6 China's cabinet has called for
the drafting of detailed plans to help achieve full
convertibility of the yuan, raising the prospect of
accelerating reforms to free up the currency eventually.
"We should have operational plans on achieving the
convertibility of the renminbi (yuan) under the capital
account," state radio quoted Premier Li Keqiang as telling a
regular meeting of the State Council, or the cabinet.
No details on yuan convertibility were given in a summary of
the meeting published on the central government's website,
While the Chinese currency is already convertible under the
current account - the broadest measure of trade in goods and
services - the capital account, which covers portfolio
investment and borrowing, is still closely managed by Beijing as
it worries about abrupt capital flows.
Chinese officials have not given a timetable on a freely
trade yuan, although the central bank has outlined the task of
making the yuan "basically convertible" by 2015.
Beijing may have to loosen its grip on the yuan to support
its long-term ambition to increase the global clout of its
currency to rival the U.S. dollar and euro, analysts say.
Li also said that the government will steadily roll out
market-based measures to reform the country's interest rate and
exchange rate regimes.
"To stabilise growth and control inflation, risks and
upgrade the economy, we must urgently deepen reforms and unveil
concrete measures," Li said.
Annual economic growth unexpectedly slowed to 7.7 percent in
the first quarter from 7.9 percent in the previous three months.
The government will push forward fiscal reforms while taking
steps to rein in local government debt, Li was quoted as saying.
"We should improve the risk control measures on local
government debt," he as saying.
China will set up regulations on overseas investment for
individual investors while regulating the development of bonds,
equity and trust markets, the cabinet said.
The country also plans reforms to railway investment and
financing systems, including allowing private investors to enter
parts of the state-dominated sector.