Russian experts, officials confident about China's economy, currency

MOSCOW - China's economy and its currency renminbi are in stable development, Russian experts and officials said Wednesday.

The Chinese yuan on Wednesday hit a five-year low against the US dollar with its central parity rate slipping to 6.5889, which some analysts said was due to expectations for a possible interest rate hike of the United States.

Yaroslav Lissovolik, chief economist at the Eurasian Development Bank, told Xinhua that the devaluation of the yuan would not be substantial, either in its scope or in its impact on the markets.

"Taking into account the previous devaluation of the yuan, it is either already balanced or is close to its fair value. If there is some space left for depreciation, it would not be dramatic," Lissovolik said.

Compared with previous rounds of the yuan's downward adjustments, the major global and regional markets have become much less concerned over a sharp devaluation this time, he said.

"Projections assume a relatively small depreciation of the yuan from the current level until the end of the year," Lissovolik said.

He noted that the yuan's fluctuation can somehow reflect the macroeconomic situation in China, and the influence of external pressures such as imminent rate hikes by the US Federal Reserve.

Alongside worries over the yuan's stability, the global market has also been concerned with the slowdown of the Chinese economy.

The Chinese government has set the gross domestic product (GDP) growth target to 6.5 to 7 percent, a relatively marked decrease compared to the double-digit figures in previous years.

However, Russian experts and officials said that China's GDP adjustment is a "natural phenomenon."

Ksenia Yudayeva, the Russian Central Bank's first deputy chief, said that the slowdown was a result of the gradual reorientation of the Chinese economy, which used to focus on exports but is now focusing on boosting domestic demand.

Lissovolik also noted that the Chinese economy is facing risks such as capital outflow, but their effects would not be devastating.

For her part, Yudayeva said China's economic restructuring offers a "window of opportunity" to Russian producers of innovative goods and the country's economy as a whole in the medium and long term.

"A window of opportunity will open for our economy to diversify and learn to produce goods that will enjoy demand in China," Yudayeva said.