Renminbi convertibility 'possible in three years'

The renminbi could become convertible under the capital account "within a three-year time frame", said a Chinese scholar with an official background.

Zhang Chenghui, director of the Finance Institute under the Development Research Center of the State Council, said on Monday that the experiment in the China (Shanghai) Pilot Free Trade Zone is critical for the renminbi's liberalization under the capital account.

"The central government has stressed that the Shanghai FTZ is not just for Shanghai but for the whole country. I believe that within three years, the Shanghai FTZ can accumulate useful experience, based on which the renminbi's convertibility under the capital account could be pushed forward rapidly," she said.

There are divergent opinions among Chinese academics on whether the capital account should be liberalized, with some prominent economists expressing concern that the economy cannot withstand the potential risks of such a bold move, Zhang said.

"I think it should be advanced step by step. The experiment in Shanghai can reveal the potential risks and how we are going to address them. Then the pilot program could be expanded," she said.

Full capital account liberalization is critical for the internationalization of the renminbi, a policy agenda pursued by the Chinese government.

The previous consensus among researchers and policymakers was that the goal would be realized by 2020. But Chinese media in 2013 reported that reform-minded officials, including People's Bank of China Governor Zhou Xiaochuan, have proposed that the process be accelerated and the deadline be moved forward to 2015.