What will be Yuan's exchange rate heading in 2019? Our own Guan Xin talked with Guan Tao, a Senior Fellow at the China Finance 40 Forum. He shared his insights on outlook of Yuan foreign exchange rate and China's economy.

Speaking at the Refinitiv 2019 RMB Outlook Summit in Shanghai, Guan Tao, former director of the Department of Balance of Payments at the State Administration of Foreign Exchange says the Yuan's exchange rate in 2019 will be basically stable, but variations remain.

GUAN TAO, SENIOR FELLOW CHINA FINANCE 40 FORUM "There are 3 possible scenarios. Firstly, if the market has confidence in the government's determination and capacity to keep the exchange rate stable, the market will not attack the yuan. In this case, the yuan will see two-way fluctuations. Secondly, if the Chinese economy stabilises while the U.S. dollar weakens, and China-US trade relation improves. These developments will boost market confidence, then the yuan may appreciate, which we have seen in the beginning of this year. And thirdly, we should also prepare for the worst. If the economy saw unexpected downward pressure, while the U.S. dollar strengthens due to various reasons, and China-US trade relation worsens, the market sentiment and supply-demand relation may take a hit, and affect the yuan's exchange rate."

GUAN XIN CGTN "Talking about China's economic fundamentals, many believe that the economy will bottom out in the second half of this year, due to government supporting policies, your take on that?"

GUAN TAO, SENIOR FELLOW CHINA FINANCE 40 FORUM "Now the mainstream expectation is we will see stabilization and improvement in the second half, after a slow start. I think the possibility is increasing. However, we should also have resilience. The government has emphasized on the shift from high-speed growth to high-quality growth. So we should pay more attention to indicators such as employment, financial risks. We should also reduce reliance on credit expansion and investment, and focus on consumption, service industry and innovation driven growth."

Talking about deleveraging financial risks, Guan says the government will continue to lower the leveraging level of State-owned sectors, but at the same time, will increase financing to small and medium-sized enterprises.

GX, CGTN.