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.
Rural poverty deepens
JASPER BECKER in Beijing
Rural incomes and spending are falling more steeply than expected, a survey in Hunan, Henan and Sichuan provinces found.
The survey, reported in the People's Daily, is a fresh sign that the central government will not be able to boost domestic demand.
Lower state grain prices have cut per capita incomes of Henan peasants by 62 yuan (about HK$57). A three-year low in the price of pigs has also damaged incomes.
The survey found that the income of Hunan pig farmers would be reduced by 5.4 billion yuan.
With 10 per cent fewer peasants finding work in towns, their remittances were also falling. A report in the People's Daily expressed fears the tax burden was not being adjusted.
In many parts of the countryside peasants have to pay taxes for butchering animals or for growing 'special products' as well as heavy fees for education, water projects and electricity.