China’s Central Bank Holds Meeting with Foreign Banks and Multinational Firms to Address Investor Worries

China’s central bank recently organized a meeting with foreign banks and multinational firms, including JPMorgan, HSBC, Deutsche Bank, Tesla, and Schneider, to discuss its policy support and address investor concerns. The move follows the State Council’s guidelines issued last month, which aimed to strengthen protections for foreign investors and provide a market-oriented environment for businesses to thrive.

During the meeting, People’s Bank of China governor Pan Gongsheng highlighted the importance of a market-oriented and law-based environment to facilitate business growth. However, despite these efforts, investment in China has been declining due to concerns over national security regulations, decoupling risks between the US and China, and the slowdown in the property market.

Foreign direct investment in China fell by 5.1% year-on-year for the January-August period, and US dollar-denominated foreign investment dropped by 9.8% in the first seven months of 2023. This decline has prompted worries about a larger crisis of confidence in China’s economy.

As investors diversify their portfolios and seek opportunities outside of China, Southeast Asian economies are benefiting from increased foreign direct investment. A report by the Economist Intelligence Unit predicts that Southeast Asia’s total foreign direct investment will surpass China’s by 2024.

Although there have been positive signs of recovery in China, such as upticks in domestic consumption and industrial production, the property market and private investment continue to decline. This indicates that the road to full economic recovery is still challenging.

Overall, the meeting between China’s central bank and foreign banks and multinational firms highlights the country’s efforts to address investor concerns and create a favorable business environment. However, challenges such as national security regulations and the property market downturn continue to impact investor confidence and divert investment to other regions.

– [Source 1]
– [Source 2]