China’s premier said Wednesday that the country’s economic growth is within the “proper range” and Beijing has no plans to allow the yuan to depreciate further.
China “successfully fended off potential systematic financial risks” and is unwilling to see a currency war, Premier Li Keqiang told an economic forum known as the Summer Davos in the north-eastern Chinese city of Dalian.
Analysts say Li was trying to soothe international concerns as recent weakness and market volatility have cooled the enthusiasm of investors.
China’s central bank devalued the yuan in August after the benchmark Shanghai index lost around 40 per cent from a peak in mid-June.
The move sparked worries that it could prompt other countries to also devalue their currencies to keep their exports competitive, in effect sparking a trade war.
More than 1,700 business leaders, politicians and entrepreneurs from 90 countries were gathered to discuss new growth strategies at the World Economic Forum’s Annual Meeting of the New Champions co-hosted by China September 9-11.
An earlier panel on Wednesday discussed the recent volatility in the Chinese stock markets, as well as the large amounts of local debt and asset-bubble risks.
Analysts say China will need to accelerate its reforms to meet its growth target of about 7 per cent this year.
The premier will address the forum again on Thursday, for an annual speech that often provides insights on policy direction.
“Li is likely to say he has an optimistic outlook and China will adopt more active policies to cheer up the economy,” said Zheng Chaoyu, professor of macroeconomics at the People’s University in Beijing.
“However it is not clear that China is aware of the extent of the problem,” Zheng said.