Foreign exchange czar: China to take “faster steps” to capital account covertability

Hu Xiaolian on Caijing’s Workers’ Day cover

Caijing‘s May 1 issue features Hu Xiaolian, the central bank’s foreign exchange chief, on the cover. The article is an interview with Hu. The below is Caijing‘s own English summary of the story:

The central bank’s foreign exchange cheif Hu Xiaolian tells Caijing in an interview that China is ready to take “faster steps” towards capital account convertability . Hu says that new central bank policies announced April 13 allowing domestic institutional investors to invest overseas weren’t intended to deflect international pressure on China to revalue the yuan. Instead, the new policies mark a further step towards an open capital account.

Although Chinese banks and businesses are still ill prepared for exposure to foreign exchange risks, the central bank wil introduce reform gradually to mitigate risk, Hu says. The central bank will set individual quotas for domestic banks governing how much each can invest overseas, based on their ability to control risk.

NOTE: Caijing publishes English summaries of their articles on their website (link below), but the latest English texts have not been uploaded yet. The summary above is from Caijing‘s print edition.