(Yicai Global) Feb. 27 -- China needs to watch closely any easing of financial regulations by the new US government, the country's vice finance minister said. "The Trump administration will vigorously promote the relaxation of financial regulation, which will have a significant impact on global financial regulation and capital flows," Zhu Guangyao said in a keynote speech at a forum yesterday. "China must pay close attention to it."
Zhu said that China must also closely follow the changes of the Federal Reserve's monetary policy. "US economic growth is improving, while its inflation rate is close to 2 percent and full employment is between 4.6 percent and 4.7 percent. Against this backdrop, the Fed is likely to adopt a tight monetary policy," he said.
Zhu also warned that if the US plans to raise interest rates while relaxing financial regulation, it will have a huge impact global financial capital flows.
"China is willing to cooperate with the US in a wide range of areas such as trade, investment, environment, infrastructure and culture, according to the consensus reached between Chinese President Xi Jinping and US President Donald Trump," Zhu added.
"The scale of China-US trade today is far more than USD500 billion," Zhu said. "For such a large trade and bilateral investment, problems and contradictions are inevitable in the cooperation process. China is willing to solve these problems and contradictions in a constructive manner, so that China-US economic relations can continue to play the roles of 'ballast stone' and 'propeller' in the overall relationship between China and the US."