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.
Farmer-salesman finds village life enriching
PROUDLY perched in the 374-square-metre home of villager Ma Riquan are brand-name goods including a Panasonic television set, a Pioneer karaoke machine and a Pioneer hi-fi. Air-conditioners grace the bedroom suites.
''I am just average in the village terms of wealth. Some households here have several million yuan,'' said the 49-year-old farmer-turned salesman.
Like fellow villagers, he has gained wealth with the blessing of government's policy on farmers.
''Since 1984, farmers here are allowed to work in enterprises as well because there is not enough labour supply to cope with the growing economy,'' he said.
That has given Mr Ma's family an opportunity to tread the road to relative affluence.
Before 1984, his family of five lived from hand to mouth. Last year, his family of seven - with a daughter-in-law and grandson - earned more than 70,000 yuan (about HK$62,000).
He had the family's two double-storey houses, each with a gross floor area of 2,000 square feet, built in 1991 for 190,000 yuan.
''Now I don't have much to worry about, except about whether the government's policy will change,'' he said.
Mr Ma, presently based in Shanghai for a county-run enterprise, earns his profit after giving a fixed sum to the enterprise.
Many of his fellow villagers also work away from the village, where the working population has an average annual per capita income of 6,000 to 7,000 yuan.
Three years ago, the family stopped cultivating and its land was allocated to six households who each has about 100 mu (about 6.67 hectares).
Last year, each of the farming households earned 30,000 yuan from agriculture. The cost of cultivating a mu of land per half year is about 100 yuan.
While the success stories of individual entrepreneurs have urged many to join their rank, that enterprising spirit peculiar to a market economy has not been completely instilled into Mr Ma.
''The risks involved in being an individual entrepreneur are great,'' he said.
''A friend of mine in Zhejiang province earned five million yuan in the first half of last year, only to lose seven million yuan because of fraud in the second half.
''He advised me against becoming an individual entrepreneur. Doing business for collective enterprises is safer.'' Despite spending 60 per cent of his time at work in Shanghai, Mr Ma is not overly impressed by its glamour and prosperity.
''Shanghai is a great place for marketing. But things are too expensive there. I prefer it here,'' he said.
Despite having a family income higher than that of a farming household, Mr Ma misses his job as farmer.
''I'd rather be a farmer. I am interested in farming, and was a farming technician for eight years.'' But he knows well that farming, like being an individual entrepreneur, entails risks.
''The risks involved in being a farmer are huge. There can always be natural disasters,'' he said.