960427

China not to make

its currency fully

convertible by 2000

BEIJING: Officials at the State Administration of Exchange Control (SAEC) said Saturday that China would not make its currency fully convertible by the year 2000.

"The so-called full convertibility of the Chinese renminbi by 2000 is not true. China only plans to achieve convertibility in current account by that date," SAEC officials told the China Daily.

China's current account includes trade, labour, and tourism.

Its capital account -- direct investment, international loans and security trading -- will remain under strict control "to avoid fluctuations in financial markets," the officials said.

On March 1, China started, on a trial basis, to include foreign-funded ventures in its existing foreign exchange swap system in an effort to open up its current account.

Ventures in Shanghai, Dalian and Shenzhen and in Jiangsu province can now transact exchanges without having to get prior approval from foreign currency administration departments.

The move has met with general approval as it cuts down on bureaucracy and provides better access to foreign currency, the officials said.

Under China's current foreign exchange swap system, domestic firms must sell all their foreign exchange earnings to designated banks and then buy it back from the banks when necessary.-APP