Tags: china | economy | yuan | currency

China Premier: Economy Stable, No Basis for Continued Yuan Devaluation

Image: China Premier: Economy Stable, No Basis for Continued Yuan Devaluation
(Dollar Photo Club)

Wednesday, 09 Sep 2015 02:00 PM

Prospects for China's economy are positive and there is no basis for continued devaluation of the yuan, Chinese Premier Li Keqiang said on Wednesday, reiterating the government's vows to push ahead with reforms and support the economy.

China does not want to see a currency war and the yuan will retain its stability, Li told a meeting of company executives at the World Economic Forum (WEF) in the northeastern port city of Dalian

"If a currency war does happen, it would only hurt China," Li added. "The continued devaluation of the yuan is definitely not conducive to the currency becoming internationalized. This is not our policy preference."

China last month devalued the yuan by nearly 2 percent in a move that stunned markets, raising concerns it could provoke capital flight, even as the country's economy stumbles.

China did not want the yuan devaluation to stimulate exports, Li reiterated, adding that there was no reason for further yuan weakness.

Asked about recent financial market volatility, Li said China needed to continue reforms in many areas to ensure its financial stability.

"Now we can say government measures have forced out the possibility of any systemic financial risks. The action was in no way meant to weaken the role of the market," he added.

A plunge of 40 percent in China's stock market since mid-June sent shockwaves across the world, fueling worries among some investors that a hard landing lay ahead for the Chinese economy.

Li said recent government policies had gained traction and China would maintain basic policy direction but would prepare to make pre-emptive adjustments.

The creation of more than 7 million new urban jobs and an unemployment rate held at 5.1 percent in the first half of this year showed China's economy was on a "reasonable track," Li said.

"We won't be swayed by short term economic fluctuations in our big picture direction," said Li, pledging to push ahead with structural reforms while stepping up targeted regulatory measures.

China's economy grew 7 percent in the first half from a year earlier - in line with the government's target for 2015, but recent downbeat data has raised risks of missing the full-year target.

© 2017 Thomson/Reuters. All rights reserved.

 
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Prospects for China's economy are positive and there is no basis for continued devaluation of the yuan, Chinese Premier Li Keqiang said on Wednesday, reiterating the government's vows to push ahead with reforms and support the economy.
china, economy, yuan, currency
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2015-00-09
Wednesday, 09 Sep 2015 02:00 PM
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