‘China stock, yuan volatility threatens economy, reform’
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.