‘China stock, yuan volatil­ity threat­ens econ­omy, re­form’

The Pak Banker - - FRONT PAGE -

In­creased volatil­ity in China's stock and cur­rency mar­kets is pos­ing a threat to the coun­try's eco­nomic sta­bil­ity and struc­tural re­forms, a for­mer ad­viser to the cen­tral bank said on Thurs­day. The stern warn­ing from Li Daokui, an in­flu­en­tial econ­o­mist at Ts­inghua Univer­sity, came as top of­fi­cials dis­cuss eco­nomic re­form plans for 2016 dur­ing the an­nual par­lia­ment meet­ing.

A plunge in China's stock mar­ket over the sum­mer and a sur­prise de­val­u­a­tion of the yuan CNY=CFXS in Au­gust have roiled global mar­kets and raised doubts over the govern­ment's abil­ity to put a floor un­der the slow­ing econ­omy. "Sta­bi­liz­ing the stock mar­ket and the ex­change rate mar­ket is a tough war that China must win dur­ing the process of trans­for­ma­tion and up­grad­ing," Li told a meet­ing of the Chi­nese Peo­ple's Political Con­sul­ta­tive Con­fer­ence (CPPCC), which ad­vises the coun­try's par­lia­ment. Li is a mem­ber of the CPPCC.

"Volatil­ity in fi­nan­cial mar­kets is pos­ing a di­rect threat to China's eco­nomic op­er­a­tions, trans­for­ma­tion and up­grad­ing," said Li, a for­mer mem­ber of the cen­tral bank's mon­e­tary pol­icy com­mit­tee, said in re­marks broad­cast in state tele­vi­sion.

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