Chinese, foreign executives expect yuan to become fully convertible in five years

Global financial services providers expect the Chinese currency can achieve full convertibility in about five years, a report from the Economist Intelligence Unit said on Friday.

The report, titled "A delicate stage: The future of the renminbi as a global investment currency", surveyed more than 200 senior executives from financial institutions both in China and abroad about the long-term future of the yuan as an investment currency.

Around 63 percent of respondents in China and 78 percent from overseas think that the yuan will become fully convertible and tradable without restrictions in five years' time.

Majorities of both groups believe it will take slightly longer, seven to 10 years, for the yuan to become a global investment currency, said the report.

According to the British think tank, 60 percent of respondents in China believe the yuan will surpass the US dollar as the world's most commonly used currency within the next decade.

This research, sponsored by UK Trade and Investment, also highlights the remaining challenges financial institutions face in addressing regulatory change and legal uncertainty.

"Despite recent market events, global financial services firms see onshore equities as one of the fastest growing international yuan business areas over the next three years," it said.

Wu Chen, editorial director of the Economist Global Business Review, pointed that financial service companies expect their yuan business and revenues to soar.

Sherry Madera, minister counselor, director of Financial and Professional Services, UKTI China, said that "Financial institutions are striving to keep up with market challenge in China, but also need to make proactive changes to their existing operations to prepare for the inevitable increased role the yuan will play in global investment activity."

"In the UK we have already seen recognition of this, with increasing numbers of partnerships between UK and Chinese firms and an open business environment that fosters innovation," she added.