Washington/Beijing – Ron Insana, an analyst from the United States, has warned that the crackdown on its own big companies by the Chinese ruling communist regime could undermine China’s position as an economic superpower. China is the world’s second-largest economy, and the ruling communist regime is threatening the “business model” that led to its rise, Insana said. Stocks of Chinese companies worldwide have plummeted, hitting the top four companies with more than 300 billion in just one month.
In his article on the CNBC website, Ron Insana, a former manager and journalist at the hedge fund, has fired a salvo of criticism at the Chinese regime‘s actions. The action taken by the ruling communist regime will lead to an exodus of foreign capital from China, Insana warned. Over the past few decades, millions of Chinese people have been lifted out of poverty, improving their living standards. Large Chinese companies, their performance, and investment in the stock market are also factors responsible for the change. If this is hit, it will shake the confidence of Chinese citizens, US analysts have pointed out.
Former Chinese President Deng Xiaoping had initiated economic reforms in the country. Today, China, which has become an economic power on the international level, is the result of Xiaoping’s policies, and President Jinping’s actions are jolting them, Insana warned. US analysts claim that Jinping is trying to put power and the party ahead of economic prosperity. Insana warned that these efforts are delivering a major blow to China’s position as an economic superpower.
Over the past few months, the Chinese ruling regime has begun to put pressure on its companies to withdraw from the US stock market. China has raised a baton at the big IT companies. In the last few months, China has dealt a major blow to international investors and the technology sector by taking action against companies such as Alibaba, DiDi, and Tencent. The repercussions of this shock were felt in the stock market. The shares of Chinese companies witnessed a fall in the stock markets in China and Hong Kong, including shares of Chinese companies in the US.
The fall has caused a great deal of unrest among international investors, and many large hedge funds have begun to reduce investments in China. Issues such as Chinese sovereignty, human rights, the law in Hong Kong, operations in the South China Sea, espionage and cyberattacks have already become targets of the international community. Against this backdrop, China’s economy could be in trouble if the investment sector signals its withdrawal from China. China, being the world’s second-largest economy, will affect the international economy as well with these issues. Therefore, the warning issued by American analysts is becoming significant.