China will this year put forward a plan for allowing yuan capital-account convertibility as part of measures to loosen control over its currency and interest rates, the nation’s cabinet said.

The yuan plan will also include creating a mechanism that allows investments overseas by individuals, the State Council said in a statement today 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.

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.

China needs to sacrifice short-term economic growth for structural adjustments, central bank Governor Zhou Xiaochuan said last month after the nation reported slower-than- forecast first-quarter expansion.
(Bloomberg)