Chinese economy shows resilience, long-term growth potential, HSBC chief executive says

Despite some short-term market volatility, the Chinese economy has demonstrated its resilience and still presents long-term growth potential and attractive opportunities to foreign investors, HSBC chief executive has said.

"We are continuing to build our business in China so that we can both support and contribute to the dual circulation model," Noel Quinn, group chief executive of HSBC, told Xinhua in a recent written interview.

Between 2020 and 2025, HSBC, one of the world's leading financial institutions, expects to invest more than 3 billion yuan ($447 million) in China, Quinn said.

"All these steps show that HSBC's commitment to supporting China's continued economic growth and internationalisation remains as strong as ever -- and is still growing," he said.

As China's GDP grew 4.8 percent year-on-year in the first quarter, such economic performance "was testament to the resilience of its economy," Quinn said, adding that facing challenges including the pandemic, China still saw "increased investment, productivity and consumption in the first part of the year."

"We appreciate that Beijing is taking action to offset the impact of the pandemic by substantially cutting taxes and building up fiscal support to individuals and businesses," he said.

Maintaining supply chains and supporting the small and medium-sized enterprises sector will stand China in good stead once growth picks up again, and China also has many available stimulus levers if needed, he said, expecting China to benefit from a strong economic recovery.

Speaking of China's recent policies and measures in such fields as opening-up, innovation and green transformation, Quinn said that China has been committed over many years to opening up its financial system and developing a sustainable and innovative economy.

"We welcome measures to promote the high-level opening-up of the financial industries. The number of foreign investors and the volume of foreign investment in China have both increased as a result," he said.

Quinn noted that there is considerable room for foreign investment growth, which would help China move up the value chain.

Quinn underscored the critical role of increased foreign investment for developing green finance, which will help China achieve its goal of transitioning to carbon neutrality by 2060.

"The depth of China's capital markets means it has genuine potential to become a global leader. Its pioneering work to build a carbon futures market underlines the vital part that the financial sector must play in the net zero transition," he said.

As for the current volatility in global financial markets, Quinn said it is now being fueled by uncertainty created by the pandemic, inflation and worries about global growth.

"China's historic predictability in this regard has bred confidence among foreign investors over the course of many years," the banker said, adding, "We fully expect China to come roaring back and, ultimately, to remain the stable economy that has proven so attractive to foreign investors."