HONG KONG, April 22 Reuters Just a few years ago, lucrative business prospects in China on the back of a booming economy led to a scramble among Western financial firms, from investment banking to asset management, to expand their footprints and source talent from across the world.

But as doubts grow about China39;s economic recovery and its markets lag global peers, many of the financial firms are taking a hit on their earnings and are reining in their ambitions for what was a key piece of their global growth strategy.

From the beginning of this year, a growing list of Western financial firms, including Fidelity International Ltd FIL, Morgan Stanley, and Legal General have either sharply cut Chinafocused jobs or have shelved expansion plans.

More companies are expected to follow suit soon as a tepid deals pipeline and lacklustre asset generation weigh on expenses and revenues, according to senior executives at foreign financial firms, headhunters, and analysts.

The souring of the China allure for Western financial firms comes at a time when Beijing has been ramping up efforts to lure more foreign capital to revive the domestic economy amid persisting geopolitical tensions.

Fund company FIL, which is cutting 16 of its 120strong China team, for example, expects its loss in the country to widen to 45 million this year from last year39;s 41 million, according to an internal document seen by Reuters.

The headcount plan of FIL has been significantly reduced for the next…