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.
First-quarter tax haul soars 26pc
The mainland's tax revenue soared 25.5 per cent in the first quarter to 1.13 trillion yuan, thanks to a robust economy and stricter tax policies, state media reported yesterday.
Hailing the growth rate as unprecedented in recent years, the State Administration of Taxation said tax revenue in the first three months increased by 229.6 billion yuan compared with the same period last year, Xinhua reported.
Bullish mainland stock markets meant 12.2 billion yuan was received in stamp tax on stock transactions, a 515.9 per cent rise year on year, said administration director Shu Qiming.
Despite the central government's attempts to limit the amount of money flowing into share markets, the mainland's combined stock market capitalisation exceeded Hong Kong's for the first time this week following a series of initial public offerings.
Without giving any figures, Mr Shu said revenues generated from the property sector had increased 35.3 per cent in the first quarter. Investment in the sector also increased by 24.3 per cent. He said that with local authorities stepping up efforts on tax collection, revenue from value added tax on land use rose 85 per cent year on year to 8.8 billion yuan in the first three months.
The industrial sector generated 310 billion yuan of value added tax, an increase of 19.7 per cent from the same period last year, as a result of a robust national economy, he said.
Foreign-invested companies, domestic enterprises and individuals contributed 284 billion yuan in income tax between January and March, up 26 per cent year on year. Income from import duties rose 24 per cent, Xinhua said, as tax collected by customs authorities reached 141.9 billion yuan, a year-on-year increase of 27 per cent.
Revenue from eastern and central areas increased 25 per cent to 792 billion yuan and 176 billion yuan respectively. In the less-developed western areas, tax revenue rose by 30 per cent to 160 billion yuan, Xinhua said.
Authorities had retrieved 38.6 billion yuan of tax, 1.9 billion yuan more than the 36.7 billion yuan last year, as a result of a nationwide crackdown on evasion. Almost 4 billion yuan was recorded in tax violations.