Wang Chunying, a spokeswoman for the State Administration of Foreign Exchange, told a news conference that over the medium to long term, the foundations in the foreign exchange market for stable operations are still solid.
"These are the bright spots that we are seeing, of course, we have also noticed some risks. For example, the surging global pandemic and geopolitical factors will have some impact on our external economy and international balances," Wang said.
Lured by cheap credit in the wake of the 2008 global financial crisis when the Fed launched quantitative easing to inject money into the economy, Chinese firms snapped up assets abroad, drawing the attention of China's regulators.
Chinese conglomerate HNA Group was earlier this year placed under a bankruptcy and restructuring process due to its liquidity crisis which stemmed from years of aggressive acquisitions abroad.
Wang said increased flexibility in China's yuan exchange rate can release market pressure and prevent expectations it will only move one way.
The yuan briefly firmed to its strongest level against the U.S. dollar in nearly six weeks on Thursday as the greenback weakened.[CNY/]
China is expected to have a current account surplus in the first quarter, though it will be smaller than the fourth quarter last year, Wang added.
(Reporting by Tina Qiao,Lusha Zhang and Ryan Woo; Writing by Stella Qiu; Editing by Kim Coghill and Jacqueline Wong)