China’s Xi Vows to Promote Healthy Development of Capital

(Bloomberg) -- Chinese President Xi Jinping urged efforts to regulate and guide the healthy development of capital and promote its positive role, signaling a softening stance toward the country’s struggling private sector as the economy slows. 

Speaking at a Friday gathering of the Politburo, the Communist Party’s top decision-making body, Xi also vowed to deepen capital market reforms and offer more space for the development of different types of capital, Xinhua News Agency reported Saturday. 

Xi’s comments came after the Politburo vowed sweeping pledges earlier this week to boost economic growth that sparked a Friday rally in both Chinese stocks and the yuan. The remarks are a fresh indication that Beijing is prioritizing growth and job creation over a crackdown on the nation’s once high-flying tech sector and debt-laden property industry. 

Xi also reiterated the authorities’ stance to prevent the “disorderly expansion” of capital and guard against financial risks. He called on officials to strengthen anti-corruption efforts in the area of capital and resolutely crack down on profiteering that’s backed by power.

The top leadership’s latest rhetoric highlights the daunting challenges China faces in arresting a sharp economic slowdown as the country’s strict Covid Zero strategy has forced major cities like Shanghai to shut down, disrupted business operations of multinational firms and roiled global supply chains. 

The Politburo’s commitment to meeting its growth target of about 5.5% for the year despite the Covid upheaval suggests stronger stimulus measures may be on the cards, including a ramp up in infrastructure spending. 

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With assistance from Bloomberg