- CNTV English - CCTV News

China's capital account liberalization remains arduous

03-01-2012 16:46 BJT

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.

"The government will be cautious in promoting capital account liberalization, as once you fling the doors open to global capital, it will be difficult to close them," he said.

Higher interest rates for the yuan in comparison to foreign currencies have already been a magnet for overseas capital, leading to an influx of speculative money and arbitrage speculation.

Zhao said the instant loosening of capital account restrictions may attract more hot money, undermining the country's efforts to curb inflation and asset bubbles.

Hot Videos view more

The celebrations are still continuing as the victorious coach, Joachim Loew, has been honored for his achievement in his hometown of Freiburg.
Germany coach Loew honored in hometown of Freiburg

Chinese men´s national team continued its preparations for next year´s Asian Cup, as they managed a one-all draw against visitors Jordan during a football friendly in Harbin, the capital city of Northeast China´s Heilongjiang Province.
China held to 1-1 draw by Jordan

The defending world champs came into the contest with a perfect 6-and-oh record, but they would be in for a tough first half before opening things up in the second.
USA beat Slovenia 119-76 in quarter-finals

Hot Stories more

UK authorities believe killer of James Foley is a British national

Across the UK the hunt is on for James Foley’s killer, who authorities believe is a British national. As Richard Bestic reports from London, Prime Minister David Cameron cut short his summer break to lead his government’s response.

Israeli war jets renews Gaza strike as truce talks stalled

Three Palestinians were killed and 40 others wounded in the intensive Israeli war jets´ airstrikes on the Gaza city on Tuesday night, shortly before an end of a 24-hour ceasefire in the Gaza Strip,

Missouri police arrest dozens after violent night

As the protests in the town of Ferguson, Missouri turned violent with police facing ´heavy gunfire´ from some ´criminal elements´, cops fired tear gas, stun grenades and arrested 31 demonstrators on Monday night.

Picture in news more

More Video News

Choose TV Program