Top officials of China announced signs of improvement of the country’s economy as capital outflows are cooling, while the investors’ confidence is expected to bolster after market volatility.   

Ahead of the China’s decline in the stock market, including the yuan devaluation, leaders of the country is constantly reassuring that Beijing will be able to cope up with its sluggish economy by means of eyeing their shaky financial markets, and their major trading partners.

Zhang Gaoli, Vice Premier told an economic forum that the economy continued to improve, according to its most recent data, along with investments on fixed-asset and employment. 

Gaoli said, "We dont want to shy away from saying that Chinas economy is facing downward pressure, but overall the progress is steady,"

Earlier this month, the National Bureau of Statistics issued January and February results on China’s manufacturing output where its growth posted weaker since 2008.

Zhou Xiaochuan, a central bank governor also told the same forum that China’s capital outflows have showed a steady progress, and stated a few data that eased concerns over the slowing economy of the country.   

In February, the central bank’s net foreign exchange sales, including the commercial banks declined as the yuan continued to steady, which is slightly led by the greenback’s retreat as further increase rate by the Fed remained at ease.


Furthermore, Gao Hucheng, a Commerce Minister reported that the foreign trade of the country is expected to perform a rebound in March after its two-month drop within the year. 

Not to Worry on Money Capital

According to the central bank’s Zhou, a few short-term speculative money might leave the world’s second largest economy, which was a setback of the trend several years ago when the country witnessed big capital inflows, but it appears that the capital flight was not worrisome.

The central bank of China constantly battles with a threatening job stemming capital outflows, citing substantial downward pressure on the country, analysts say.

In order to maintain the economy’s growth, the government aims to adjust preemptive policy, Vice Premier Zhang stated, reassigning the official stance.

He also mentioned that the government must comply with prevention of risks mainly in stocks, debt, currency and property markets. Cross infection must also be prevented between the markets and ward off systematic risks in the economy.  

Supply-side reforms will be pressed by China, in order to slashed excess industrial overcapacity. Sectors such as coal, including steel, aluminum and plate glass must be given attention to, he added.

The government is expecting China to post a growth rate between 6.5 percent to 7 percent for the current year. Meanwhile, the country grew by about 6.9 percent last year, suggesting its sluggish pace for more than two decades.  

Monetary policy is expected to be more flexible this 2016, pledged by the country, regardless its dependency on high fiscal spending, including rate cuts to maintain its economic growth and bolster the pain from structural reforms.

Lou Jiwei, the Finance Minister witnessed slight impact on the market as Moody downgraded its overview on the government debt of China.


Conversely, Moody’s Investors Service downgraded its outlook on the country’s government debt on March 2 to “negative| from “stable”, citing conflicts on the capability of officials to implement economic reforms, including increasing government debt and declining reserves.

He said, “I don’t care too much about its ratings.” 

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