China’s Premier Li Keqiang chaired a meeting of the State Council’s executive meeting on March 15, which addressed the international crisis that will affect China, as it will all nations. “The world economy is faced with much great uncertainty, and there are divergent views about how things may go. A strong global economy is good for China. Yet massive quantitative easing will also bring spillover effects, which could affect China and even the entire world,” Li said. According to an account in Xinhua, “the meeting underlined the imperative to keep abreast of shifts in the world economic trends and their implications for China.… This will help make informed anticipatory adjustments to the policies introduced… Efforts shall be made to prevent and defuse various risks and potential dangers and consolidate the foundation for economic recovery.”
At the same time, China Daily reported on a warning issued by Zhang Xiaohui, former assistant to the governor of the People’s Bank of China (PBC) central bank and dean of the PBC School of Finance of Tsinghua University. “China should pay close attention to recent changes in the global market,” Zhang stated. China Daily added: “The former central bank official warned that a large inflow of liquidity into the financial market could result in a rise in asset prices, which might fuel inflation expectations and increase volatility.… But we need to monitor the changes in stock prices and exchange rates in order to avoid huge outflows of foreign capital for speculative purposes,” Huang said.