China's tightening policy "should stay"

China has spent the bulk of its foreign exchange reserves on dollar-denominated assets, such as US treasury bonds. It has been pondering diversifying the structure of investment.

"But now it is clear that the euro also has risks," Yu said. "It would complicate China's policymaking."

China's exports are set to suffer, Yu said, since the crisis would be a drag on the growth of Europe, China's largest trade partner. "Growth is no longer the top priority for crisis-hit countries; they have to first repay their debt and convince investors they are capable of doing that."

The impact on China's exports, however, could be limited, said Zhang at the State Council's Development Research Center.

"The weakened euro will affect trade settled in euros, but the majority of China's trade with European countries is settled in US dollars," he said, adding that China's previously announced export target of 10 percent year-on-year growth for this year should not necessarily be changed.

One outcome of the European crisis is that China is facing less pressure for the yuan's revaluation as the US dollar is rising. But the dollar's rise could damage US exports, which US President Barack Obama wants to double in five years.

"Therefore, the US could press harder for the yuan's appreciation to benefit its export sector," Yu said.

China will "improve the yuan's exchange-rate formation mechanism", but the yuan would remain "basically stable", the People's Bank of China said in a quarterly report on Monday.

Yu also said China's current monetary policy, which is tightening, should not be changed despite the external uncertainties brought about by the European crisis. "We should not rush to change it given the excessive money supply growth and high asset prices."

By doing that, he said China's economic growth rate should slow this year.

China International Capital Corporation cut its forecast of China's year-on-year growth for this year to 9.5 percent from 10.5 percent in its report released on Monday, citing the country's tightening measures and external uncertainties caused by the Greek crisis.