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.
Beida rides on Olympic wave
Beijing Beida Jade Bird Universal Sci-tech has hitched a ride on the Olympic bandwagon, with plans to spend 314.19 million yuan on a minority stake in a key property and infrastructure project in the capital.
The Growth Enterprise Market-listed company said yesterday it had agreed to buy a 44 per cent stake in Beijing Chengjian Donghua Real Estate Development, which is responsible for the construction of a residential-office complex and transport hub.
Located in Dong Zhi Men Wai over an area of 729,000 square metres, the project comprises a rail and bus interchange, a five-star hotel, serviced apartments and office towers.
Dong Zhi Men Wai is one of the main infrastructure projects slated for completion before the 2008 Olympic Games.
Beida said the project, valued at 3.5 billion yuan at the end of last month by Chesterton Petty, would cost six billion yuan to build and was due for completion in 2007.
Chengjian Donghua had a net asset value of 16.8 million yuan at the end of last year, having suffered an after-tax loss of 13.2 million yuan.
'To diversify and enhance the group's long-term earnings base, the directors consider it appropriate to invest in other projects in China,' Beida said.
The deal is pending the approval of independent shareholders.
Beida does not expect to contribute directly to project funding, which will be raised from bank borrowings and pre-sales of commercial properties at the site.