China will deepen financial sector reforms and fend off major risks in the economy, the banking and insurance regulator said on Thursday.

China's economic fundamentals showed no possibility of a sharp yuan depreciation and the yuan could rise in future, Guo Shuqing, Chairman of the China Banking and Insurance Regulatory Commission (CBIRC), said in a statement published on the regulator's website.

The yuan had entered "a reasonable range of two-way fluctuations," said Guo, who is also the Communist Party chief of the central bank.

A trade war initiated by the United States could not be sustained, Guo added.