Program: Cavuto Coast to Coast
Station: Fox News Channel
DAVID ASMAN: Well, meanwhile, Beijing’s crackdown on US listed stocks is fueling a record drop in those stocks. Let’s bring back Scott Martin. Susan Lee and John Lonski. Good to see you all. Susan, what is going on in China right now? I mean, President Xi is a communist, even though he’s allowed you know, he sits where he does because of the sort of free market pushes of his predecessors. Is he going back to the old a stricter communist model of dealing with the economy?
SUSAN LI: Well, if you ever go to China, you’ll see it’s actually a very capitalist society. People there just want to make money and make their lives better. But there’s a lot of debate in terms of what exactly is a long term goal of Beijing and Xi Jinping and the Communist Party. Because really, when you’re clamping down on big technology like they have been in the last few months, you’re really cutting off your nose to spite your own face. Right. So what is a long term goal? Is it just domination, control over data, over the economy, over the markets? Or do you want your home grown talent to make lives better for the billion people that live in the country? I think there’s a lot of debate about that. But I will say that Bitcoin has actually benefited from this clampdown. A lot of money has been taken out of these Chinese stocks and worse two day wipeout since, two thousand eight. That money has gone into other assets, speculative assets like Bitcoin, John.
ASMAN: So far, the Bush administration hasn’t really changed that much. The policy of the Trump administration, one of those rare things where it hasn’t undone the good stuff that his predecessor did. But do you think that will last or do you think we may have sort of relations with China that perhaps a lot of people would would would voice their opinions against?
JOHN LONSKI: Well, I think the Biden administration will continue to take a critical view of what is taking place in China with the intentions might be they will be very wary of attempts by Chinese companies to purchase U.S. companies. And Susan, I think put it quite well. The Chinese government appears to be shooting itself in the foot. I mean, they have a very creative, innovative, highly educated population that could do wonders at creating wealth for China. And yet they seem to be putting limits on the ability of the Chinese economy to grow. And this brings up an important point. You know, years ago, the 1950s, high ranking U.S. academics, Paul Samuelson made the argument that the Soviet Union would surpass the US economic never came close to happening now. And the more you try to stifle initiative in an economy, the less likely is the economy to reach its full potential.
ASMAN: Well, Scott, on the other hand, you see all those people there at one point, four billion of them, and companies like Coca-Cola and the others at Nike that have their their fingers all over the place are willing to forgive all of the problems that China has. They’re willing to kowtow to the Chinese Communist Party to to maintain their market share in China. But and this is a very important but that I want you to deal with. You have the issue of the pandemic. We will not forget where the pandemic came from. We will not forget the way they unleashed it by allowing the people from move to travel to Europe and to travel to us and infect the rest of the world and perhaps perhaps having invented it inside a lab. Won’t there be repercussions from that that will affect economically our relations with China?
SCOTT MARTIN: Well, there should be, David. I mean, I’m waiting for the administration every day to do something about what happened in the Wuhan lab a little over a year ago. And certainly if you look going forward and based on history, you can’t trust China, whether it’s economically, whether it’s medically. We don’t have a friend there, obviously. And if you look at back, you know, earlier this month, they had the hundred year celebration, I guess it was, of the CCP, which was highly their militaristic. It was highly affronted to the rest of the world as some of the comments that President Xi made versus the other rest of the world leaders and rest of the world countries about what the Chinese government was going to do to people. And so, look, going forward, if we think we’ve got a friend in China, we’re sorely mistaken and it’s already costing them internally. Yes, a lot of money as far as how they’re clamping down on their own, their own companies, but also what it’s doing to some of our companies that are trying to get in there and do business
ASMAN: Susan,John Scott, what a great panel. Thank you all for being here. Appreciate it. Well, it’s one of the.
Kingsview CIO Scott Martin discusses comments from China’s President Xi, and the influence recent events have had on Chinese stocks.
Program: Cavuto Coast to Coast
Station: Fox Business News
NEIL CAVUTO: So it’s really a it brought in this selloff that ensues right now, not as bad as it was when we’re off with more than 500 points, the Dow up about 250 points. The Nasdaq has taken on the chin. Technology stocks in particular have been saying take it on the chin. This actually began in China overnight, in Asia by extension, after people saw what was happening. The technology sector there. And China might lay a lot of the blame for this on the reversal of fortunes and its once thriving technology arena because it’s clamping down on technology. And that is not only hurting Chinese investments there, but now technology in general everywhere. Scott Martin back with us. Luke Lloyd, back with us. You know, Luke, I mean, the Chinese might have started this, the interest rate thing notwithstanding, by cracking down on their own offerings to say nothing of what they used to do to Alibaba and all the rest showing more their military concerns than their economic ones. What do you think’s going on here and how long does it last?
LUKE LLOYD: Yes, so I talked to earlier about how you should stay away from international companies. I think China is where you should stay away from the most. You know, China probing US companies should absolutely. One hundred percent concern investors. You shouldn’t be buying Chinese stocks at this point. The regulatory headwinds that could come from both sides aren’t worth the risk DiDi listing over here in the US then being taken off the App Store in China was a big middle finger from China. They could have done that before the IPO, but they chose to wait. And then the US is already talking about reacting by withdrawing the ADR from the US exchanges. I like to invest in free market countries and China is not that at the snap of a finger they can choose to destroy a company. And unless a company was trading an extremely low valuation at a price that I was willing to pay, I wouldn’t be a buyer.
CAVUTO: It’s very, very interesting, you know, Scott, what’s also interesting is the fact that either China doesn’t much care or it wants its cake and wants to
eat it, too, which is a dumb expression because you have the cake, please just eat it. But I digress. I’m wondering whether China, you know, played this out in their heads and now is shocked at the market fallout to say nothing of growing US pressure to crack down on this sort of stuff, as Luke said, maybe just not to buy their stuff all together. What do you think?
SCOTT MARTIN: Well, it’s a hard thing to avoid, typically, because a lot of companies do business in China. China is on pace to be the largest economy in the world in a matter of years. Billions of people, obviously, the companies want access to. I’m not sure China even lets their people eat cake, Neil, which means there’s more for us in the United States. But if you look at President Xi comments just about a week ago at the 100th anniversary celebration, I guess you’d call it a party on Chinese terms. You know, the things that he said at that at that presentation were actually pretty shocking, pretty aggressive, pretty militaristic and pretty scary for the rest of the world. So when you look at what China is doing, whether they mean to cause an uproar or whether they mean to cause selloffs or not, I don’t think they really care. Neil, I think China is ready to take on anyone and everyone, and it’s something we should all be aware of with respect to how the markets, at least initially, at least as we started to figure out who the real state President Xi is, as the markets have started to figure that out, they haven’t liked what they’ve seen so far.
CAVUTO: All right, good point, gentlemen, I’m sorry to truncate this, but with this breaking news, unfortunate, we have to. We’re going to.