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Chinese finance minister says currency intervention necessary

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BEIJING, July 9 (Xinhua) -- Chinese Finance Minister Lou Jiwei on Wednesday said currency interventions are necessary when the economy has yet to fully recover and capital inflow is abnormal.

"The U.S. side has constantly raised the issue about whether intervention is still needed in our foreign exchange policy," Lou said at a press briefing on the China-U.S. Strategic and Economic Dialogue(S&ED).

"We say it's difficult (to abandon the intervention) when the economy has yet to fully recover, and cross-border capital flows are not normal," Lou said.

The sixth round of S&ED and the fifth round of High-Level Consultation on People-to-People Exchange (CPE) started in Beijing on Wednesday.

On U.S. monetary policy, Lou said the orderly winding down of the quantitative easing (QE) is good, but it will cause some fluctuations in developing countries, including China.

Lou said Beijing faced challenges in managing hot money inflows resulting from the end of QE.

With the stabilization of the U.S. economy and the growth of employment, the QE is expected to end later this year.

On China's economic growth, Lou said China is emphasizing structural reform and is unlikely to repeat the kind of massive economic stimulus that came in the wake of the 2008 global financial crisis.

In contrast to past high growth, China's economy has now entered a stage of medium-to-high growth, Lou said.

"Therefore the global economic recovery depends on the situation in the United States," Lou said.

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