Not a setback

With economic advancement, regulatory and other improvements have to come in — and I do see this as a step moving forward to improve the Chinese system.

Chi Lo

senior economist, Greater China at BNP Paribas Asset Management

That is “exactly what international investors like to see if they want to get exposure or increase exposure to China,” he added. “China cannot really stand still and be a developing market all the time. And with economic advancement, regulatory and other improvements have to come in — and I do see this as a step moving forward to improve the Chinese system.”

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Lo said financial scandals, such as the accounting fraud in former Nasdaq-listed Luckin Coffee, had previously hurt China’s capital market credibility. So, it’s time to fix such problems that are more widespread in the domestic Chinese market, he added.  

On regulations aimed at tech companies, Lo pointed out that China is not the only country reining in the sector. Developed countries such as the U.S. and those in Europe have moved to varying degrees to increase supervision over tech companies too, he said.



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