The former PBOC governor warned however which economic modelling could not factor in a quick shift within the mood within China.
“We saw when the Lehman Brothers event happened. There was sudden panic along with contagion so which kind of thing can be not very easy to analyze,” he said, before adding which with economic growth of 6 percent a year along that has a floating exchange rate, the Chinese economy was well placed to withstand external shocks.
Chinese stocks on the country’s CSI 300 index have fallen 13 percent since the United States unveiled its tariff targets in mid-June. In contrast, the U.S. S&P 500 index has risen 4 percent.
Zhou said which while the trade war was a “major reason” for the stock slump, there was also some domestic reasons at play.
“The Chinese economy can be facing a change of strategy by a fast urbanization process to a brand new form which needs to diversify by various state sectors,” Zhou said. “Also there can be a lot of listed companies, which created pollution along with investors are (at which point) not so friendly to these stocks.”