The internationalization of China's Renminbi (RMB) has been completed by 75 percent, Vice Chairman of the Shanghai People's Political Consultative Conference Zhou Hanmin told China.org.cn during today's "Reconsider East Asia's Future" meeting of the 7th Summer Davos Forum held in Dalian of northeast China's Liaoning Province.

Zhou made the remarks when talking about the Shanghai Free Trade Zone (FTZ). RMB internationalization lies at the core of the FTZ and is also a necessity. "China's RMB internationalization has been realized by 75 percent thus far, based on the 40 items under the seven categories of the IMF concept of capital accounts; this fact is known to few though," Zhou said, "The remaining 25 percent should be tried out carefully at the Shanghai FTZ."

Apart from RMB internationalization, Zhou also said the reform at the FTZ will necessarily entail a reform in interest and exchange rates. "China has been striving to fully liberalize its exchange rate for some 20 years and what remains now is the liberalization of the deposit interest rates, which should be resolved in the Shanghai FTZ."

In regards to reform in exchange rate, Zhou said, "China's exchange rate is not immune to change, but represents the "snake in the tunnel", with certain fluctuation." The RMB is largely pegged to the dollar, but he suggests it should be pegged to a basket of important currencies.

Zhou also emphasized the Shanghai FTZ is meant for overall reform instead of being confined to the financial areas. There would also be reform in the mechanism and legal systems, Zhou said. What troubles the reform now is not a lack of laws, but whether or not the existing laws can be implemented in a voluntary and complete way.

The Shanghai Free Trade Zone was recently given the go-ahead by the State Council. The overall draft is expected to be revealed as early as this week.