Foreign exchange management entails a global perspective, taking trade facilitation and hot money inflow control both into account, said Yi Gang, head of the State Administration of Foreign Exchange (SAFE) at a press conference during the annual session of parliament.

"SAFE will further streamline the procedures for foreign exchange settlement to facilitate trade," Gang said. "At the meantime, it has to keep a cautious eye at the flow of capital to preserve the overall security of its foreign exchange assets."

As huger capital will flow into China this year to capitalize on China's relatively high interest rates over intensified expectations of a more valued yuan, China will keep the exchange rate of yuan "basically stable," said Yi Gang.

The currency's exchange rate is decided by market, Yi said.

The yuan's exchange rate should be kept at a reasonable and balanced level while the government continues to improve the currency's mechanism, he added.