Investors praise China crackdown as bulls charge

China’s escalating campaign to clean up its financial system is winning plaudits from some of the world’s biggest investors.

Templeton Emerging Markets Group and Fidelity International are among money managers who’ve endorsed a raft of measures from Chinese regulators over the past month to curb leverage, boost transparency and prevent excessive speculation. The investors called on authorities to stick with their campaign even after it sent local stocks to a three-month low and roiled domestic bond markets.

Proponents of the clampdown say shortterm market turbulence is a small price to pay for reducing the risk of a major financial blow-up in Asia’s largest economy.

In one sign that the reform drive has further to run, President Xi Jinping gave it a stamp of approval by presiding over a rare meeting with top financial regulators last week.

His participation was featured prominently across state media on Wednesday.

“We welcome such a move and believe this to be overdue,” said Mark Mobius, the executive chairman of Templeton Emerging Markets Group, who’s been investing in developing nations for more than four decades. “If they are determined to remove systemic risk, this may only just be the beginning.”

Tightening the screws on a financial system flush with unprecedented levels of debt is fraught with risk. But Chinese leaders may feel the time is right to act after an uptick in economic growth over the past two quarters and an easing of trade tensions with the administration of US President Donald Trump.