SERIOUS risks could hamper for years the Chinese Government's bold plan to unify the yuan rates and reform the tax system - which is the right way to go.
The worst danger is that if the Government cannot make a clean break with the old system, the new one may take years to live up to its promise.
The plan itself suffers from some serious contradictions that grew out of the Government's policy dilemma.
On the one hand, Beijing has no option but to create an essentially free, centralised market for foreign exchange, as the absence of such a market in the past has only led to a proliferation of black market transactions.
On the other hand, the rulers realise that they are stepping into the unknown because a free market for foreign exchange may be incongruous with China's primitive banking and enterprise system.
Given China's structural imbalances, an unfettered foreign exchange market may result in large swings in the value of the currency and occasional runs on precious foreign exchange reserves.