China is quietly pushing back its loose timetable to make the yuan freely convertible, policy insiders say, as authorities fear removing capital controls too soon could unleash damaging speculative flows that will make it harder to reshape the economy.
There has never been a hard target date for a freely traded yuan, although the central bank had outlined a goal of making it ‘basically convertible’ by 2015. That rhetoric has been toned down recently, and now analysts are looking to 2020, a deadline implied by the government’s reform agenda set out last November.
Heading off a sharp slowdown in growth and domestic reforms, such as fixing the fiscal system to rein in debt, overhauling banks and state conglomerates will be done first, according to economists at top government think-tanks and policy advisers.
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