visimoney
TLDR
- China’s new financial regulator, the Central Financial Commission (CFC), pledges transparency and predictability to boost investor confidence.
- Foreign investors have been leaving China, leading to a record low in foreign direct investment (FDI) in 2023.
China’s Central Financial Commission has recently made promises to enhance regulatory transparency, stability, and predictability in an effort to restore investor confidence. The commission, a newly established arm of the Communist Party, stated that China will align its financial policies with international standards to promote openness and integration with the global market. This move comes as foreign investors are hesitant amid a slump in the Chinese economy, particularly in the property industry, employment figures, and local government debts.
While China’s GDP grew by 5.2% in 2023, investor sentiment remained low, leading to a significant drop in foreign direct investment (FDI) to a 30-year low. The country also experienced a decline in its stock market, prompting the removal of the chair of the securities regulator. However, there was a positive note as the inflow of foreign investment in China improved in the fourth quarter of 2023.
The CFC aims to make Shanghai a more competitive international financial center and strengthen the status of Hong Kong. It also highlighted the importance of high-level security and early risk identification and management. President Xi Jinping emphasized the critical role of managing financial risks for China’s future development, particularly amidst challenges such as government debt, corruption, and lagging financial services compared to technological and manufacturing advancements.
