[MANILA] China's economy, as well as Asia's, are unlikely to slow down sharply this year despite Chinese stock turmoil that has rocked global financial markets, the Asian Development Bank president said Friday.
Sharp selloffs in the Chinese stock markets this week have renewed fears about the fate of the world's second-largest economy and the knock-on effects across the globe.
"I don't have a very pessimistic view about China," ADB president Takehiko Nakao told reporters in Manila, adding the bank was maintaining its 6.7 per cent economic growth forecast this year for China.
This would only be slightly lower than its 6.9 per cent growth projection for the country in 2015.
Developing Asia as a whole, which has been highly dependent on China, should grow 6.0 per cent, or up from 5.8 per cent forecast for 2015, Mr Nakao said.
Mr Nakao said China was successfully undertaking important reforms, such as making its economy less reliant on investment and more on domestic consumer demand.
He also cited ongoing reform of state-owned enterprises, expansion of the social security system and reduction of disparities between Chinese cities and rural areas.
"Also there is room for stimulus... because its fiscal position is strong and inflation is subdued," he said.
Mr Nakao said that, despite the latest turmoil on the Shanghai bourse, the index was still about 1,000 points above its end-2013 level.
Mr Nakao also said he did not believe the yuan currency's depreciation was a deliberate attempt by the Chinese authorities to weaken it to boost exports.
"This depreciation is not because of artificial intervention to lower the renminbi," he said, using another term for the yuan.
"It is in a sense the other way. They don't intervene, that's why there is a marked depreciation." Mr Nakao said a rapid depreciation could trigger a reciprocal move by other countries.
"Already some countries have depreciations in currencies. But I don't think this is a currency war," he said.