Chinese crackdown on US-listed stocks signals start of 'Cold War', Roach says

26th Jul 2021 12:23

(Sharecast News) - Beijing's moves against US-listed Chinese firms may be signalling the start of a 'cold war' between the two countries, a well-considered expert said.

In remarks to CNBC, Stephen Roach said: "I am a congenital optimist when it comes to China. But I find these actions really quite disturbing.

"China is going after the core of its new entrepreneurial driven economy, and it's going after their business models."

Furthermore, the fact that almost everything nowadays wound its way through global supply chains, including via China, meant that US companies were very much exposed.

On the same day as his interview, Chinese regulators targeted education stocks including TAL Education and New Oriental Education and Technology.

The Shanghai Stock Exchange's composite index dropped 2.34% to 3,467.44 on the news come Monday.

Roach, now a senior fellow at Yale University, was also a former Morgan Stanley Asia chairman and chief economist for the investment bank.

"These are actions that are really in getting to the core of what has been so exciting about China for a number of years. They concern me a lot."