China's State Administration of Foreign Exchange (SAFE) senior official cited Monday the full convertibility of Renminbi (RMB) under capital accounts as 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," Wei Benhua, the SAFE deputy chief, told Xinhua.

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 520 billion US dollars. It had issued shares overseas collecting 28 billion dollars and B-shares on domestic stock bourses netting 5 billion dollars 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 386.5 billion dollars, 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.

Source: Xinhua