Yale Economist Says US Pushing China To A ‘red Line’ And Companies Doing Business In The Country Need To Come Up With A ‘Plan B’

• US-China tensions are nearing the “red line”, according to Yale economist Stephen Roach.
• Roach said US support for Taiwan could spell trouble for firms doing big business in China.
• He warned of a possible conflict between the two countries and said that American companies needed to come up with a “Plan B”.

US-China tensions are reaching a critical point, according to Yale economist Stephen Roach, and American companies doing business in the country may want to come up with a “Plan B” in case relations between the superpowers deteriorate.

In an interview with CNBC on Thursday, Roach pointed to recent comments from House Speaker Kevin McCarthy, who spoke of “friendship” between the US and Taiwan and “economic freedom, peace and regional stability” when visiting Taiwan’s president on Wednesday. talked about the importance of ,

“All the multinationals that have made such a huge commitment to China want to start working hard on a plan B, at least here,” he said.

Although US politicians haven’t said it explicitly, McCarthy’s visit is another sign of support for Taiwan amid its tense dealings with China, Roach said, meaning US-China relations could be coming to a turning point. Are.

“For China, that’s their red line, and they pushed back last August, and they certainly will push back after this meeting,” Roach said, referring to former House Speaker Nancy Policy’s visit to Taiwan last August. Mentioned the increasing tension after doing. “It clearly raises a real warning flag to them that we’re going to have our foot in their throats.”

Roach has raised concerns over America’s relations with China for months, and has previously said that America’s current economic struggles could open the door for China to assert its global dominance. Other economists, such as “Dr. Doom” Nouriel Roubini, have also warned of China’s growing economic power as it deepens its partnerships with countries such as Russia.

Chinese officials have already responded to McCarthy’s visit with displeasure, according to a statement by the Chinese foreign ministry, calling the meeting a “serious violation” of the nation’s one-China principle, adding that the US “crossed the line”. doing and doing provocative work”.

Roach pointed to Apple’s recent plans to diversify its production to countries such as Vietnam and India, saying some corporations have already begun to move away from China as the potential for conflict grows.

Source: markets.businessinsider.com