Yuan depreciation still controllable

Chen Dongqi, the deputy director at the Academy of Macroeconomic Research of the National Development and Reform Commission recently expressed his thoughts on China's economy during an interview with Radio Television Hong Kong.

Chen explained that China's economy has reached a "new normal," one marked by slower overall growth as well as qualitative structural improvements. Over the short term, Chen added, the government still needs to stabilize growth, maintain employment and anchor market expectations.

In terms of looser monetary policy, Chen saw the possibility of future interest rate cuts as contingent on economic conditions in the country. More cuts could be possible if GDP growth drops below 7 percent or if near-term risks become too acute.

As for the renminbi, pressure on China's currency could become even more intense next year. Some factors may drag its value lower. The continuation of policies aimed at dismantling government controls over the yuan will open the door to further pressure from the US dollar. Overall, the yuan depreciation against the US dollar will still be controllable next year.