China's goal to achieve the yuan's capital account convertibility doesn't necessarily mean 100 percent convertibility or a free-floating currency, Zhou Xiaochuan, the country��s central bank chief, said on Monday.

"We shouldn't interpret capital account convertibility as a free currency, with cross-border asset transfers without control, zero financial supervision, and the internationalization of the yuan," said Zhou, [Hong Kong Company Formation|Hong Kong Company Registration]governor of the People's Bank of China.

The International Monetary Fund didn't set up clear and unified standards to measure the openness of capital accounts, and 100 percent convertibility barely exists, Zhou said at a forum in Sanya, Hainan province.

Zhou said China's target to open up convertibility doesn't rule out the necessity of maintaining certain existing filing procedures when entities conduct cross-border financial transactions, financial supervision, and certain capital controls to prevent money laundering and tax avoidance.

Earlier this year, China's top securities regulator, Guo Shuqing, a candidate to be the next central bank governor, said the full convertibility of China's currency is just around the corner, and the economy's capital account is already far more convertible than outside institutions give it credit for.

He said 16 items in China's capital account are convertible now, 17 are basically convertible and seven are partially convertible. Further, he said, "There is no item that is inconvertible."

Zhou also said the country doesn't welcome short-term speculative capital inflows, and capital controls are still necessary in some circumstances to fend off financial risks brought by "hot money" inflows in emerging economies.[Hong Kong Company Registration Guide]

Dealing with capital inflows into China would be a larger problem for the country than money rushing out.

China has announced a series of measures to liberalize its capital accounts in recent months.

Earlier this month, the State Administration of Foreign Exchange said that it will launch a pilot system on Jan 14 to better monitor cross-border capital flow.

In November, the administration said it will clear the way for foreign investor capital to flow in and out of the country more easily by waiving and simplifying regulations.

And a pilot program was launched in Shanghai to allow yuan cross-border lending by onshore multinational corporations to offshore parent companies or related companies within the same group, viewed as another significant step toward liberalizing capital accounts.[Businesses Registration]

"For some items under the capital account, once the government has made up its mind and implemented policies, they would be open for convertibility all together very quickly," Zhou said. But coordination between some foreign-exchange policies and other regulatory rules - for example, the imposition of an export tax - will take some time, he added.