Economist Stephen Roach warns that Beijing's crackdown on US-listed Chinese companies will have widespread market repercussions.
According to Arabiya Net, Roach, who is considered one of the leading global experts on Asia, believes that the measures point to the early stages of a cold war.
I find China's recent actions disturbing, said Roach, the former head of Asia at global investment bank Morgan Stanley. He added, "China is pursuing the core of its new economy, which is driven by entrepreneurship."
According to Roche, tensions between the world's two largest economies could reach levels not seen since the early 1970s.
Even if US companies do not have direct trade relations with China, he said, everything they touch goes through global supply chains. Therefore, the coldness of the relationship between the United States and China has significant implications for American companies and investors who invest in American companies. Nor can you stay away from the Chinese lines of communication.
As CNBC's Crazy Money host Jim Kramer airs a similar warning to investors, he thinks it's too risky to invest in Chinese stocks that are trading in China. in US stock exchanges due to the regulatory threat.
On Friday, regulators in Beijing targeted the shares of Chinese education firms TAL Education and New Oriental Education and Technology, as both companies fell.
Roach, now a senior fellow at Yale University, has been sounding the alarm for months. He also warned that US-China relations were eroding and that the two countries were on the brink of a cold war.
