A senior advisor to the People’s Bank of China said China’s currency
will be fully convertible in the next 5 years as long as there is no
major shock to the economy. Li Daokui dismissed suggestions that
freely floating the yuan will hurt China’s exports and its economy.
“With a fully convertible currency there will be both inflows and
outflows of currency. So currently there is a great, great potential
for our households and enterprises to get our foreign currency
reserves and go out and invest abroad,” Daokui said Wednesday at the
summer meeting of the World Economic Forum in Dalian.
Daokui said China was looking at both yuan convertibility and
liberalization of interest rates as part of a bundle of reforms. He
said the next step in the liberalization agenda would be to free up
the amount of foreign currency Chinese households and businesses can
get access to.