China will not pursue competitive devaluation of yuan: Premier Li

China will stick to market-oriented reform of the exchange rate formation mechanism and will not pursue competitive devaluation of its currency, Premier Li Keqiang said Wednesday.

"China will create conditions for a stable exchange rate," Li said at the opening plenum of the Annual Meeting of the New Champions 2018, also known as Summer Davos, in Tianjin.

[File Photo: IC]

The yuan exchange rate has shown signs of fluctuations recently, raising concerns that China is devaluing the currency on purpose.

"It is not true, as one-way devaluation of the yuan will bring China more drawbacks than benefits," Li said. "China's economic fundamentals are solid, with a sound balance of international payments and sufficient foreign exchange reserves. The yuan exchange rate therefore is fully capable of remaining basically stable at a reasonable and balanced level."