The conflict between Hong Kong authorities and pro-democracy protestors in the region should grab the attention of investors, say China scholars Gordon Chang and Stephen Roach.
Chang is author of "The Coming Collapse of China," and Roach is a senior fellow at Yale
As an investor, "I would be very concerned," Chang told CNBC
. "You have two sides that are digging in. Beijing that can compromise a little bit, but not too much because they're worried about the democracy contingent and what might happen in the mainland."
On the same topic, Roach told CNBC, "We certainly can't dismiss this at all." But he said there's a good chance for compromise in Hong Kong. "This problem is too important to let a situation get out of control," he said.
While China's economy is expected to slow from the 7.5 percent growth rate of the second quarter, "China is very mindful of the risks of staying on the same course," Roach said. "They are in the process right now of changing the model."
Investors say Chinese stocks are vulnerable. The protests are "going to spook some investors who are worried that this could drag out, affecting the business climate in Hong Kong,"
Vasu Menon, vice president of wealth management at Oversea-Chinese Banking Corp. told Bloomberg
"It’s happening at a time when the U.S. Federal Reserve is talking about tightening monetary policy, a time when China is slowing down. So now you have a third layer of uncertainty weighing on the Hong Kong stock market."
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