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Any possible deterioration of tension among major powers needs to be prevented because it could lead to military confrontation, he said, suggesting that crisis management or dialogue within a consultation mechanism to deal with crises has to be put in place.

Anna Monardo

Apart from compensation and incentives for replacing outdated capacity with clean and effective capacity, the authorities should adopt more proactive policies to help axed capacity make arrangements for staff deployment, assets and properties transactions, and debt handling, according to Wu Lixin, deputy director of the strategic planning research department at the China Coal Research Institute.

Another indicator of less capital outflows, China's forex reserves rose for the fourth month in a row in May to total .05 trillion, an increase of billion from a month earlier.

Any official exchange between the United States and Taiwan under any excuse is a violation to the one-China principle and the three joint communiques between China and the United States, and an intervention in China's internal affairs, Geng said.