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People's Daily Online>>Opinion

China's capital account liberalization remains arduous


16:38, March 01, 2012

BEIJING, March 1 (Xinhua) -- China's capital account liberalization will be a gradual process, as the country needs to improve its ability to address risks such as hot money and asset bubbles, analysts said.

China has made significant progress in capital account liberalization in recent years by gradually easing its grip on its currency as it moves toward full convertibility.

However, some experts have been pressing for faster loosening of the government's strict capital controls.

The latest instance was a central bank report published last week in the Financial News, which said "the time is ripe for the country to open up its capital account."

The report, written by Sheng Songcheng, head of the central bank's statistics department, listed the benefits of capital account opening, including assisting Chinese companies in expanding globally, promoting the internationalization of the yuan, restructuring the economy and increasing household investment channels.

"We might never find an appropriate time to open up a capital account if we wait until conditions mature for interest rate liberalization, currency liberalization and yuan internationalization," the bank official said.

The question of whether reforms will be implemented in the way the report envisions has yet to be answered.

"The timetable in the report cannot be regarded as an official timetable," said Zhao Qingming, a senior researcher with the China Construction Bank.

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