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In a damage control exercise, China’s regulator reassures foreign banks that they are welcome to work in the mainland

2022, a crucial year for China

Amid rising uncertainty after China cracked down on the private sector last year, market regulator China Securities and Regulatory Commission (CSRC) assured executives of top western banks and asset managers about the economic prospects of the country. Chinese President Xi Jinping’s call for ‘common prosperity’ also spooked several investors.

News agency Reuters, quoting unnamed sources said that Fang Xinghai, vice-chairman, CSRC, hosted a virtual meeting “with more than a dozen foreign financial institutions on Tuesday.

The news agency said that Fang reassured the meeting participants that China will achieve ‘respectable growth’ in 2022 as it prioritises economic growth for this year. 

Meanwhile, on Friday, the International Monetary Fund in its annual review said that several imbalances in the Chinese economy have worsened which will lead to a delay in the country’s transition to consumption-led growth.

Also read: Will 2022 become China's make or break year as "stability" becomes the new mantra?

Earlier India Narrative reported that 2022 will be a break or make year for China. “The year 2021 was marked by stringent regulatory clampdown especially on the private sector but Beijing, which is now witnessing a slowdown in its economy, could shift gears next year and focus on stability,” the report said.

China’s economy grew at 4 per cent in the October-December quarter of 2021 and for the full year, the figure was 8.1 per cent.

The IMF has also noted that the global economy now is in a weaker position than previously expected. “As the new Omicron Covid 19 variant spreads, countries have reimposed mobility restrictions. Rising energy prices and supply disruptions have resulted in higher and more broad-based inflation than anticipated, notably in the United States and many emerging market and developing economies,” it said.