Xiao Gang, a member of the National Committee of the Chinese People's Political Consultative Conference (CPPCC) and former chairman of the China Securities Regulatory Commission (CSRC), shared his thoughts on China's economic growth, foreign investment and capital market reform in a recent media interview.

Even 8.1 percent growth doesn't mean China's economy will return to fast-growth track.

When asked about the World Bank's projection of 7.9 percent growth of the Chinese economy in 2021 and an even higher growth prediction of 8.1percent from the International Monetary Fund, Xiao said that these upbeat predictions comply with economic laws but don't necessarily mean that China's economy will be back on the fast-growth track.

Noting that by taking 2020 and 2021 together, China's average GDP growth for these two years is 5.5 percent. Xiao pointed out that that means the country's economic growth is back to normal and is consistent with the trend of a gradual economic slowdown, which China has experienced since 2010.

He said that GDP growth will be an important indicator for China's macro-economic regulation in 2021 and beyond, and will play a fundamental and guiding role in macro-economic governance in such areas as finance, currency, employment, industries, environmental protection and regional coordination.

It's untrue that foreign capital is leaving China.

Responding to the view that foreign capital is leaving China, Xiao said that this claim runs against the facts.

He pointed out that China was the world's biggest foreign investment recipient in 2020, standing in stark contrast to the sharp decline in foreign investment in developed Western countries. He cited a UN report showing that global foreign direct investment (FDI) plunged 42 percent in 2020 to $859 billion, and in particular, the FDI in developed countries fell 69 percent, hitting a 25-year low. However, China brought in $163 billion in FDI last year, a 4 percent increase.

Xiao said that the Chinese economy stands out globally because China quickly contained the pandemic and stayed committed to a broader opening-up. The country's ultra-large market size and innovation-driven development are also hugely appealing to the world, he added.

Xiao also mentioned the great efforts made by China's local governments and banks to help foreign enterprises in the country overcome shortages of parts, workers and funds. Such efforts prove that it's impossible to disengage China from the global supply chain, he said.

He said he believes that economic globalization is an irreversible trend and that China is in a prime position to create new advantages for global economic cooperation and competition.

Allowing bond defaults doesn't mean bad faith is permitted.

Noting that China now has the world's second largest capital market, Xiao said that a series of steps have been taken in recent years to ensure China's capital market is more capable of and efficient in facilitating technological innovation and serving the real economy. These measures include implementing a registration-based initial public offering (IPO) system and the launch of the sci-tech innovation board (STAR).

He said he expects the proportion of direct financing – especially equity financing – in China's capital market to continue increasing in 2021, with the market becoming more vibrant and resilient.

Talking about the importance of regulating China's credit bond market, Xiao pointed out that allowing the emergence of default is a sign of maturity for the corporate bond market. However, it doesn't mean enterprises can act in bad faith and get away with their defaults, he added.

Instead, Xiao cautioned that bond issuers should cherish their credibility and commit to paying off their debts.