Premier Li Keqiang met with Christine Lagarde, the IMF managing director, who is on a visit to Beijing to attend China Development Forum 2016 in the Great Hall of the People on March 21.
Premier Li said that uncertainties in the world economy are increasing and major economies have to enhance coordination with macro policies to maintain and promote the stability of the world economy and financial system.
The government will attach great importance to the sound communications with the financial market. China will make further efforts on dialogue and cooperation, and release signals beneficial to restoring confidence in the market as well as the stability and growth in economy, he added. The Premier also congratulated Lagarde on her re-election as IMF managing director.
Regarding policies of financial market, the Premier said that China does not expect currency war will happen in the world, as it will have bad effect on the recovery of global economy. China will not devaluate renminbi to stimulate export, because it is not good for the transformation and upgrading of Chinese economy.
China will continue to promote a market-oriented reform and legalized construction of the financial market. The country will also steadily promote the reform of formality mechanism of RMB rate, the Premier said. RMB rate will be made to fluctuate in a reasonable range according to the situation of Chinese economy and the demand to maintain financial stability, he added.
The Premier stressed that many large commercial banks in China are State-owned, and the country’s deficit-to-GDP ratio, especially the deficit ratio of the central finance is low, while the residents’ deposit ratio is relatively high.
The central government can guarantee sufficient capital reserves in banks, and the central bank also has many backup financial measures to cope with financial risks, thus China has the ability to avoid the regional and systematic financial risks, he said.
Lagarde congratulated the successful holdings of China’s two sessions and said that China’s 13th Five-Year Plan has attracted close attention from the international community. It is helpful for China’s economy to continuously play a leadership role in the world economy development, Lagarde added.
China has made outstanding achievements in strengthening foreign policy communications relating to some issues, such as RMB exchange rate, which greatly enhances the confidence of the international market, she said. The IMF applauds China’s deepened reform and wishes to strengthen communication and cooperation with China, Lagarde said.
Central bank governor Zhou Xiaochuan also attended the meeting.