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在线翻译:
szdaily -> In depth -> 
Qianhai to lead yuan reform
    2012-07-10  08:53    Shenzhen Daily

    THE Central Government unveiled measures June 29 to create an experimental business zone in Shenzhen that will lead its drive to internationalize the yuan and deepen ties with Hong Kong.

 Qinahai will be developed over the next eight years on reclaimed land in western Shenzhen and serve as an experimental zone for offshore yuan transactions.

“The country’s policy is to gradually open up its capital account and realize the full convertibility of the yuan,” said Zhang Xiaoqiang, vice chairman of China’s National Development and Reform Commission, the state planning agency.

“Qianhai, as the first experimental zone of the country’s modern service industry, should be a pioneer of that,” he told a news conference.

The government has been gradually loosening its tight grip on the yuan since a landmark revaluation in 2005, both under pressure from trading partners who claim an undervalued currency has distorted trade and as it aims to make the yuan a global currency.

The plan enlists Shenzhen to help drive a new wave of financial reforms aimed at reinvigorating growth.

China’s factory sector shrank in June for the eighth consecutive month according to a preliminary manufacturing survey by HSBC. Premier Wen Jiabao’s 2012 economic growth target of 7.5 percent would, if realized, be the lowest since 1990.

The government hopes the yuan will one day attain global status similar to the dollar.

But the journey will be a long one, with full yuan convertibility that would allow the currency to flow freely across borders, a prerequisite to global financial dominance, still considered a long way off.

“They are not ready,” said Dariusz Kowalczyk, economist at Credit Agricole CIB. “For full convertibility you need to have a much more liberalized foreign exchange and interest rate policy.”

Liu Dongmin, a senior researcher at the Chinese Academy of Social Sciences who helped to draft part of the Qianhai plan, said China should move prudently in freeing up the yuan.

“The best way is to do an experiment first,” he said. “When pushing yuan globalization, we must take full advantage of the Hong Kong market and also help further develop the market in Hong Kong.”

The plan announced June 29 will allow eligible firms in Qianhai to enjoy a preferential 15 percent corporate tax rate and aims for the zone to issue yuan bonds in Hong Kong.

China will also offer support to Hong Kong and Macao companies to operate telecoms joint ventures in Qianhai, paving the way for operators such as Hutchison Whampoa and PCCW to offer services on the mainland.

(SD-Agencies)

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