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Crackdown shows China’s ready to do ‘whatever it takes’ when it sees social problems, major Asia bank says

Dennis Lam of DBS says stock market volatility is not a consideration when China wants to address socioeconomic issues.
For sectors that face high risk of regulation, including education, e-commerce, internet and health care, it’s “prudent for the investor to basically expect the worst,” he said.
His comments come after a week of volatile trading for Chinese tech and education stocks, including two listed in the U.S.

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China’s crackdown on private education signals that Beijing is willing to take strong action when it perceives socioeconomic problems — regardless of what investors may want, according to an equity strategist at a major Asian bank.

“The government is ready to do whatever it takes to rectify perceived social, economic issues,” DBS’ Dennis Lam said during a webinar Thursday, pointing to the speed, efficiency and strength of China’s new policy.

“Stock market volatility is not a consideration at all,” according to Lam.

For sectors that face high risk of regulation, including education, e-commerce, internet and health care, it’s “prudent for the investor to basically expect the worst,” he said.

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