Xi’s squeeze taking the verve out of China Inc
by William Pesek July 15, 2021
China’s Sinovac vaccine is quickly changing from a hoped-for diplomatic triumph to a sign that China isn’t yet ready for the global cutting-edge prime time. Initially hailed as the developing world’s trump card against Covid-19, the vaccine is suddenly facing an epidemiological crisis. Efficacy doubts have Singapore deciding people who received Sinovac should be characterized as unvaccinated.
Count Cathie Wood of Ark Investment Management is among those growing skeptical of Xi’s economic management. In her case, it’s Chinese President Xi Jinping’s fast-widening tech crackdown that raises big questions about the new model he appears to be developing on the fly.
“Investors have to rethink the entire China structure,” warns David Kotok at Florida-based Cumberland Advisors. He says it means, at a minimum, that Ma’s Ant fiasco “is not a one-off” and that “everything China touches must be viewed with suspicion.”
Adds Wood of Ark Investment Management: “I do think there’s a valuation reset” concerning the prospects for large Chinese tech firms. “From a valuation point of view, these stocks have come down and again from a valuation point of view, probably will remain down.”
When analysts look at the decisions Xi has made over the last 12 months, they’re often framed relative to the US – ie, in terms of how this move, or that policy tweak, will advance Beijing in its rivalry with Washington.
Read the full story at the Asia Times website (paywall): https://asiatimes.com/2021/07/xis-squeeze-taking-the-verve-out-of-china-inc/
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