The outlook for China's economy is very favorable, deputy governor of the People's Bank of China said Monday.

"I think (the outlook for) China's economy is very good," Wu Xiaoling said, ahead of a meeting of Group of 10 central bankers in Basel. Asked about whether investors had recovered their confidence after recent declines in equity markets, Wu said it was to be expected that prices would fluctuate. "It's natural for the stock market to go up and down," Wu said. But she added that it would be beneficial to the market if investors behaved ¡°more rationally."

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