China is working to lift control of interest rates and give financial institutions more freedom to price deposits and loans.

In a latest move toward interest rate liberalization, China's central bank raised the upper limit of the floating band of deposit rates to 1.5 times the benchmark from the previous 1.3 times.

Currently, the yuan's convertibility on the capital account is subject to strict control in order to prevent huge volumes of capital outflow. The country has promised free convertibility.

During the political "two sessions" in March, central bank governor Zhou Xiaochuan pledged to accelerate reform and opening up of the capital market in 2015, with the aim to make the yuan convertible on the capital account.

Zhang Zhiwei, Deutsche Bank's chief China economist, expected major progress in this direction in 2015 and consequently more capital inflow into China.

"An open capital account will benefit China as money inflow will drive up prices of stocks and bonds," said the economist.

Xiao Gang, head of China's top stock market regulator, said in January that 2015 will see the phasing out of the current approval-based method for initial public offerings (IPOs) and the implementation of a registration-based system.

"The new system will allow the market to play a deciding role and establish a boundary for regulatory power, as well as protect investors' interests," Xiao said.

The cabinet reiterated its stance to carry out these reforms in the 2015 plan, and the implementation will likely speed up this year.

Firm determination

While some analysts said China may compromise reform commitments to a pressing need to stabilize ailing growth, the 2015 plan signaled firm reform determination.

"The government will actively adapt to the economic 'new normal', and roll out forceful reform measures," said the plan.

At a meeting of the Central Leading Group for Deepening Overall Reform earlier this month, Chinese President Xi Jinping asked officials to dedicate their efforts to the country's reform drive.

"We should have the courage to change ourselves, face up to challenges, and deepen reforms in a comprehensive way," said Xi.