The International Monetary Fund has taken a bold step towards boosting its role in the world economy, by passing a resolution calling for all member countries to bring in capital-account convertibility. In the case of China, which this year introduced current-account convertibility, it would be required after a transitional period, to allow full convertibility. This means the yuan would become convertible into hard currency for all types of transactions, whether simply for settling accounts or sending huge capital flows out of the country. China, which is one of the world's largest recipients of capital flows - including about US$40 billion in foreign investment last year - still retains restrictions on how much can be remitted out of the country. The transitional period being proposed is designed to allow countries which do not already have capital-account convertibility to make necessary structural and macro-economic reforms first, in order that capital-account convertibility does not harm their economies. 'This is historic,' IMF managing director Michel Camdessus said. Under a decision made by the IMF's policy-making Interim Committee, the fund also voted for 'appropriate jurisdiction over capital movements'. The scope of such jurisdiction, though, has yet to be carefully defined, while transitional provisions have also yet to be agreed. The committee ordered that specific recommendations addressing such questions should be made at the next meeting in Hong Kong in September, when the monetary fund and the World Bank hold their annual meetings.