温州推动金融改革向前

Authorities in Zhejiang are drawing up the details of a financial plan which may eventually allow individuals in the city of Wenzhou to make overseas investments using the yuan.

At this point, Chinese citizens are only allowed to invest abroad in securities or to set up businesses through asset-investment programs run by the state.

Hou Ruoshi is a researcher with the China Institutes of Contemporary International Relations.

"It will not only promote the internationalization of RMB and RMB to become international reserve currency, but also solve the bottleneck problems of China's overseas investment."

Doctor Di Dongsheng, an economist with Renmin University, says the new program should help China enter a new economic era.

"Allowing individuals to make direct overseas investments in yuan means private capital's entering capital export sector. Besides, the investments are made in yuan rather than in US dollar or euro, which is a new way of currency export."

The move by the authorities in Zhejiang follows a string of bankruptcies in the city of Wenzhou which eventually prompted the central government to step in.

Private, black-market lending in the entrepenurial hub led to a string of suicides and business owners disappearing to avoid repaying their loans, which in some cases, were being lent with interest as high as 40-percent.

For more on this situation, we spoke earlier with Shen Hong, China Bureau chief of Dow Jones Newswires.