(Yicai Global) Jan. 9 -- China cannot allow its currency to weaken more than 25 percent against the US dollar this year, said a former advisor to the country's central bank.
Capital flight and downside pressure will continue in 2017, but the yuan's devaluation should not be unlimited, Yu Yongding, former People's Bank of China advisor, said at an economic forum over the weekend, the Economic Information Daily reported.
China should scale back intervention in the foreign exchange markets and liberalize exchange rates, Yu has said at a number of public events. He is also a board member of the Chinese Academy of Social Sciences.
Economic growth will decline further to between 6 percent and 6.5 percent this year, but China's economy will escape a hard landing, Yu said at the forum. The real estate market will decelerate and prices may fall into negative territory, he added.
Infrastructure investment is an important driver of economic growth in China, but sector growth already exceeds 20 percent, leaving very limited room for further increases, Yu said. Exports are also unlikely to perform well due to a combination of factors, he said.