The recent softening of global economic growth is "strongly welcome," Indonesia's investment chief told CNBC Wednesday, warning of financial risks that had been building up in China and beyond.
"I would go as far to say 'thank God' for the global economic slowdown," Thomas Lembong, chairman of the Indonesia Investment Coordinating Board, a service to assist foreign investors in the country, told CNBC.
"Because in my view the previously globally synchronized economic boom was built on some rising financial risks, particularly an out-of-control shadow banking sector in China and a bubble in technology shares and investments," he said, speaking at the World Economic Forum (WEF) in Davos, Switzerland.
"So, from a policy point of view I think the correction in technology stocks and the deleveraging campaign in China, which might be causing a slowdown, is strongly welcome. Yes, the (global) economy is slowing down moderately but I think the financial risks that were building before are being addressed," he said.
Indonesia is the largest economy in Southeast Asia, but it's seen a change in attitude from dominant economic powerhouse China. Foreign direct investment into Indonesia from emerging markets like China slowed last year, Bank Indonesia data from the second quarter of 2018 showed.
Lembong said China had now become much more "cautious and calculated" in its investment attitude amid an economic slowdown in the country and its more fragile outlook, particularly in light of its ongoing trade tensions with the U.S.