PBOC's caution amid cash crunch will pay off

Firstly, China, as the world's second biggest economy, has played a significant role in the international economic and financial system.

Beijing continues to adopt a prudent monetary policy, avoid monetary expansion, and effectively manage domestic inflation, which will help curb the prices of global raw materials and major commodities, and help ease negative effects brought by the US quantitative easing policy.

Moreover, the Chinese government has proposed to upgrade the use of China's foreign exchange reserves and supported more Chinese companies to invest abroad.

A huge amount of Chinese capital in the overseas market will help create more job opportunities and boost the economic development in foreign countries.

Furthermore, more financial resources have been invested in the advanced manufacturing and new strategic industries, and in the upgrading of traditional industries. It contributes to a new round of international labor division and the adjustment of global industrial distribution.

Meanwhile, Beijing is supporting a growing domestic consumption, such as the consumption of major durable consumer goods, education and tourism, and speeding up low-rent housing construction.

These measures will obviously fuel a consumption boom and expand domestic demand, and thus will drive the growth of exports of foreign goods to the Chinese market.

What's more, China has generated a vast amount of valuable experience in changing its financial system to an open and market-oriented one, which will offer some references for other countries.

Reform is painful, but it also paves the way for future gains. China's economic restructuring will unavoidably cause short-term instability and volatility in the market. But it's worthwhile to do so if it is the price that has to pay to avert a possible bigger crisis and to reshape China's economy toward a more sustainable model.