Concerns on growth dispelled

Zhou Xiaochuan

"We will continue to adopt a stable monetary policy," Zhou said. "We will focus on maintaining healthy and stable domestic growth and shifting to a new growth pattern against the backdrop of the new normal of the economy."

Economists have expected the monetary authorities to further cut interest rates and lower banks' reserve requirement ratio to offset the downward pressure. But the benchmark interest rates have remained unchanged since October.

Zhou said the quality of China's growth has been improving. Consumption growth contributed 66.4 percent of GDP growth last year, while energy use per unit of GDP dropped by 5.6 percent, showing positive signs of the shift of growth pattern to a consumption-driven model with higher efficiency. He added that China opposed using currency depreciation to make its exports more competitive.

"There is no basis for persistent yuan devaluation," Zhou said.

He also said the recent fluctuations in the yuan's exchange rate had reflected well the country's managed floating exchange rate regime, which is based on market supply and demand with reference to a currency basket. The US dollar remained dominant and had the largest weight in the basket, he said.

Zhou said that he had noticed concerns over the country's declining foreign reserves and capital outflows in recent months. But the decline was normal and consistent with the ongoing economic restructuring that was aimed at achieving a more balanced growth model, he said.

China still has the world's largest foreign exchange reserve, but it dropped to $3.33 trillion by the end of December — the lowest level since late 2011 and $110 billion less than a month ago, according to the central bank.

Zhou said that while the proper level of reserves needed to be further discussed, China is able to cope with possible challenges. "Currently, there's nothing to worry about."

Li Daokui, an economics professor at Tsinghua University and a former member of the central bank's monetary policy committee, was cited by Chinese-language media as saying that foreign reserves this year should not be lower than $3 trillion to stabilize the exchange rate of the yuan.