China can cope with any US rate hike turbulence

The interest rate hike announced by the US Federal Reserve on Wednesday has so far failed to produce a major ripple effect in emerging market economies. Policymakers in these countries, however, should continue to remain alert over the accumulative effects of future US interest rate hikes and balance sheet cuts.

The Fed decided to raise the benchmark interest rates to a range of 1 percent to 1.25 percent on Wednesday and hinted at another rise later this year.

Although stock markets fell in the wake of the Fed's announcement, the falls were generally mild, reflecting that the decision had already been well priced in. China's benchmark Shanghai Composite Index even rose slightly on Thursday trading.