An employee bundles yuan notes at a bank in Ganyu county, Jiangsu province. China's top securities regulator says the currency will become fully convertible not long from now. [Photo / China Daily]

China's currency is just around the corner from being fully convertible and the economy's capital account is already far more convertible than outside institutions give it credit for, said China's top securities regulator on Wednesday.

"At present, we have a very good chance to carry out the strategy of realizing convertibility of (the) yuan And it will not be too long from now," said Guo Shuqing, chairman of the China Securities Regulatory Commission.

Guo said 16 items in China's capital account are convertible now, 17 are "basically" convertible and seven are "partially" convertible.

"There is no item that is inconvertible," he said. "The country's capital account is actually far more open than is assumed under the estimations of various institutions such as the International Monetary Fund."

He said there is no "absolute" and "unchangeable" standard for use in measuring the openness of capital accounts.

"Countries in different phases of development must make their own analyses in accordance with their own methods of opening up and their own situations."

Guo made the remarks at the opening ceremony held for the 37th annual conference of the International Organization of Securities Commissions in Beijing.

He said China would be careful about the notion of "fully free convertibility", and convertibility under capital account doesn't mean there will be no capital control.

China will gradually relax the limits placed on investments made by qualified foreign institutional investors, or QFII, and renminbi qualified foreign institutional investors, or RQFII.

It will also do more to monitor and manage the flow of capital across national borders, Zhou Xiaochuan, governor of the People's Bank of China, the central bank, said on Wednesday at the conference.

While China shows increasing confidence in managing capital inflows by adopting a more welcoming attitude to foreign investors, capital is flowing out of the world's second-largest economy more quickly.

Concerns about capital outflows became more intense after the country's yuan position for purchasing foreign exchange, an indicator of capital inflows or outflows, showed its first monthly decline in April this year, going down by 60.6 billion yuan ($9.58 billion) from a month earlier to 25.6 trillion yuan.

China must both ensure that its financial regulations jibe with economic conditions and strictly avoid systemic risks, Zhou added.

He said the country's economic growth in the first quarter, measured at 8.1 percent, was sound and consistent with what authorities wanted to see but that the economy still contains many risks.

Zhou said the capital market is an irreplaceable means of promoting economic restructuring.

The government will speed up financial products such as treasury bond futures, commodity options, and interest-rate swaps, he said.

As the global economic crisis continues, securities markets are expected to take up the task of financing economic growth, which cash-strapped governments and financial institutions can no longer do, the International Organization of Securities Commissions said in a press release.

"Pressure is growing for regulators to ensure that robust and transparent markets are prepared to meet the rising demand for capital," it said.