Brexit has put world economy in uncertainty zone: China PM

Brexit vote has hit global financial markets and the world economy faced new uncertainties at a time when the recovery from 2008 financial crisis still falls short of expectations, Chinese Premier Li Keqiang said on Monday.

The leave vote of the UK referendum has had an effect on global financial markets, and the world economy is facing increasing uncertainty, Li said while addressing the Annual Meeting of the New Champions 2016, also known as the Summer Davos Forum, in the northern port city Tianjin.

For its part, China, the world’s second largest economy, is committed to maintaining and developing relations with the EU as well as and the UK. Europe is an important partner of China and Beijing expects not only a solidary and stable EU, but also a stable and prosperous UK, state-run Xinhua news agency reported. 

Speaking to business leaders, policymakers and academics from more than 90 countries, Li said that world economic recovery still falls short of expectations eight years after the financial crisis.

No country can talk about its own development without talking about the world economic environment, he said, stressing concerted efforts to tackle challenges. He proposed structural reform, industrial upgrades and efficient global governance as ways to drive the world economic recovery.

Li said China, whose economy slowed down to 6.9 per cent last year, will continue opening up its service and general manufacturing sectors and keep the renminbi generally stable within a reasonable and proper range.

 China will open wider to the outside world, improve its open economy, further open up the service and general manufacturing sectors and build a fairer, more transparent and predicable investment environment for foreign investors, he said, adding that China will give equal treatment to domestic and foreign businesses alike. 

China will maintain a managed floating foreign exchange mechanism that is market-based and adjusted in reference with a basket of currencies, he said. Chinese economic fundamentals eliminate the possibility of long-term yuan devaluation, he said.