Xi reins in the economy

Xi reins in the economy
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Islam News – Xi Jinping is dealing with China’s economic problems the same way that he has approached issues for most of his decade in power: by getting the Communist Party more involved.

At the annual gathering of China’s national legislature, which ended Monday, Xi introduced a series of sweeping changes to the regulatory framework that would allow the party to assert more direct control over financial policy and bank regulation.

China’s economy, which is growing near its slowest pace in decades, is teetering from a real estate sector in crisis. Xi needs bankers to comply with his vision and allocate capital in the ways that China wants its money spent, without jeopardizing the financial system.

Heads are already starting to roll. Last month, Tian Huiyu, the former head of one of China’s biggest commercial lenders was charged with abuse of power and insider trading. And Bao Fan, a prominent investment banker, vanished.

Challenges: The financial sector is struggling to respond to the shaky balance sheets of local governments — overrun with debt after paying for “zero Covid” policies — and banks that lend to them.

Related: China will start issuing visas to foreign tourists again today, Reuters reports.

Analysis: On “The Ezra Klein Show,” Dan Wang, an expert on U.S.-China competition, explores how China’s growth trajectory halted.

Source: The New York Times

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