CHINA has put forth signal to propose plans to allow freer flows of its currency in and out of the nation as part of measures to loosen control over the yuan and interest rates by this year. The plan on yuan capital account convertibility will also include a way to let individuals make overseas investments, the State Council said in a statement yesterday after a meeting led by Premier Li Keqiang on the focus of economic reforms in 2013. Other measures include improving controls on risks from local government debt, expanding trials of value added taxes on companies and pushing forward changes to the country's household registration system.

Future changes may include removing quotas on foreign investment in the nation's bond and stock markets and giving Chinese companies more freedom to borrow overseas. Li in March pledged to open the economy to more market forces and strip power from the government as part of efforts to restructure growth. The general principle of the opening up is to be gradual, starting from long term investment to short term capital flows and from a quota-management system to a free flow of money, now a Beijing based researcher with the Chinese Academy of Governance. The State Council statement didn't give additional details on the capital account plan.