Capital controls key, says UBS

Capital controls to provide for an orderly opening of China's capital market are an appropriate policy choice by the Chinese authorities, which are under pressure to strike a balance between sustaining growth and containing financial risks, Axel Weber, chairman of UBS Group AG, said on Monday.

The government has applied tighter scrutiny to capital outflows against the backdrop of the depreciation of the Chinese currency amid concerns that huge capital flight could destabilize the domestic economy and spur volatility in the financial markets.

The Swiss bank chief anticipated that Chinese policymakers' monetary stance will remain unchanged in 2017 while continuing the implementation of capital controls to maintain an orderly opening of its financial markets.