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.

If China wants to keep the yuan from falling too far, it has to intervene in the foreign exchange market. Photo: AFP

China’s US$3 trillion question

President Xi Jinping will face a daunting task when he addresses global political and business elites at the World Economic Forum in Davos, Switzerland, later this month.