The governor of the mainland's central bank is in no hurry to make the yuan convertible on the capital account and says that the financial crisis has proved Beijing was right to be cautious.
An article by Dai Xianglong was published in the People's Daily yesterday to mark the 50th birthday today of the People's Bank of China.
Indicating a major shake-out in the troubled investment and trust sector, he said firms in the sector would be forced to split their trust and securities businesses.
Beijing made the yuan convertible on the current account in December 1996 but retained tight controls on the flow of money in the capital account.
'The facts have proved that this was good for controlling the size and structure of our foreign debt and protecting the interests of foreign investors and has received the approval of the foreign world,' Mr Dai wrote.
'We will not reimpose foreign exchange controls on the current account.
'As to implementing convertibility on the capital account, we are not in a hurry but will wait until conditions are suitable. We will look at the pace of domestic reform and the development of a new order in international finance to reach our final goal of full convertibility.' These controls were one of the main reasons why the mainland had managed to avoid the worst effects of the Asian crisis.