The Chinese yuan, also known as the renminbi, is already convertible under the current account - the broadest measure of trade in goods and services. However, the capital account, which covers portfolio investment and borrowing, is still closely managed by Beijing because of worries about abrupt capital flows.
Funds pour into mainland
About 21 billion yuan (about HK$19.55 billion) poured into China's stock markets yesterday, with Shenzhen grabbing the major share.
Shenzhen maintained its allure, with turnover swelling to 14.2 billion yuan, from 12.8 billion yuan on Tuesday and 14 billion yuan on Monday.
Turnover in Shanghai reached 6.84 billion yuan, compared with 6.73 billion yuan on Tuesday and Monday's 8.9 billion yuan.
The combined turnover of both markets was 21.04 billion yuan, against Tuesday's 20 billion yuan and Monday's 23 billion yuan - the highest since Beijing banned same-day trade in January last year.
Led by speculative buying, the Shenzhen A-Share Index yesterday gained a further 3.03 per cent to 345.91 points, its highest level in almost three years. The Shanghai A-Share Index eased 0.35 per cent to 981.862 points.
Mainland brokers said the market was rife with speculation Shanghai authorities were mobilising state-backed brokerages to drum up support for domestic stocks.
Analysts said that if Shanghai continued to drift lower, it would not be able to recoup lost ground due to the widening gap with Shenzhen.