CHINA’S opening up of its economy will help it cope with the trade frictions with the United States, a central bank adviser said yesterday, adding that China cannot go backwards on its market reforms.

But China will forge ahead with its reforms at its own pace, Liu Shijin, an adviser to the People’s Bank of China (PBOC), said at a finance forum in Beijing.

A trade war has seen China and the United States imposing tariffs on billions of dollars of each others’ goods, roiling financial markets and adding to fears of a slowdown in global economic growth.

Chinese President Xi Jinping and U.S. President Donald Trump are due to meet over trade at the G20 summit in Argentina at the end of November.

“The Sino-U.S. trade frictions are still ongoing, private firms’ expectations are unstable, and some people are saying they cannot see clearly and are a bit anxious,” Liu said.

To cope with the trade frictions, China should implement a high level of opening up of its market and economy, but it will push ahead with those reforms on its own steam and “not being forced by others,” he said.

“We have achieved great success in building a market economy after 40 years, but it’s still imperfect. China’s market economy is still at a low level and imperfect,” Liu said.

But China will persist with its reforms, allowing the market to play a decisive role in allocating resources, he said.

Meanwhile, Xu Zhong, head of the PBOC’s research bureau, said at the forum yesterday that monetary policy is less effective in stimulating China’s growth as its economy faces a significant increase in downward pressure.

The central bank has slashed banks’ reserve requirements four times this year, and financial markets are wondering if it is considering more aggressive steps such as a cut in its benchmark lending rate.

China had cut benchmark interest rates several times in the course of a year from late 2014. Rates have been kept steady since the last reduction in October 2015.

The downward pressure on China’s economy is caused partly by previous policy adjustments, Xu said.

China should improve its short-term demand management, Xu said, adding that it should strengthen policy coordination and avoid one-size-fits-all policies.(SD-Agencies)