Expats Living in Shanghai

China's Next Step on Yuan Is Convertibility, Zhou Says

[BEIJING] The People's Bank of China's next step in overhauling the exchange rate system will focus on convertibility, governor Zhou Xiaochuan said, as his omission from a top Communist Party committee indicated he will retire.

"For the central bank, I think the next movement related to the yuan is going to be reform of convertibility," Mr Zhou told the annual meeting of International Financial Forum, an advisory organisation, in Beijing on Saturday. "We are going to realise it, we are moving in this direction, we need to go further, we will have some deregulation."

The governor's comments underscore pledges made by the ruling Communist Party during a once-a-decade power transition last week to promote freer movement of capital in and out of the country for investment purposes and to make the exchange rate more market based.

China is seeking to boost the use of the yuan in international trade and finance to reduce the US dollar's global dominance and curb its own reliance on the currency of the world's biggest economy.

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