The further tapering of the US Federal Reserve's monthly asset purchase would have little impact on the Chinese economy, analysts said on Thursday.
The Federal Reserve, the central bank of the US, expressed faith in the US economic recovery on Wednesday (US time), as it continued trimming its monthly asset purchases, one of the Fed's main stimulus programs, by $10 billion.
"Economic activity is rebounding in the current quarter and will continue to expand at a moderate pace," Fed Chair Janet Yellen told a news conference on Wednesday, citing inspiring improvements in household spending and jobs market, according to Reuters.
As expected, the Fed scaled back its monthly bond-buying from $45 billion to $35 billion starting from July, keeping it on pace to bring the program to an end in late 2014.
The move came as no shock to the market, and the Chinese economy, which is buffering against its own set of rebalancing challenges, is less likely to be impacted, Chen Wei, an analyst at Beijing-based brokerage house China Minzu Securities Co, told the Global Times on Thursday.
If there is any potential implication of an improving US economy for China's economy, it will be mostly positive, according to Sheng Hongqing, chief economist at China Everbright Bank.
The short-term confidence of the Fed adds to optimism on the outlook for China's exports which will prop up the overall economy, Sheng told the Global Times on Thursday.
Helped by a rebound in the global economy, notably the US economic recovery, China's exports rose more than expected in May, growing by 7 percent year-on-year during the month, an acceleration from a 0.9 percent rise logged in April, customs data showed.
As for potential capital outflows following the improving US economy, Sheng said, "We shouldn't be too concerned with it."
On one hand, the Fed's action is expected to further rein in speculative capital inflows motivated by interest rate arbitrage, serving to avoid any massive influx of hot money. On the other, the economy still has sufficient liquidity in the market, so it will be less worrying even if there is a sharp fall in capital inflows due to dwindling arbitrage, he noted.
A weakening yuan and the slowing economy have led to a reduction in speculative capital flow into the country.
In May, China's central bank and financial institutions purchased foreign currency with a net worth of 38.665 billion yuan ($6.27 billion), the smallest tally in nine months.
