A 'capital war' is accelerating between the US and China, and the coronavirus pandemic is only making it worse, according to one investor

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    trump xiREUTERS/Kevin Lamarque

    • The coronavirus pandemic is accelerating a capital war between the US and China, Michael Howell, the CEO of CrossBorder Capital, said in a Tuesday interview with CNBC.
    • “The decision to share dollar swap lines with 14 other nations, effectively forming a de facto group of 15 countries, including America, that have access to dollars, that is a critical development,” said Howell. 
    • This is an effort to contain China, according to Howell. 
    • Read more on Business Insider.

    The coronavirus pandemic has accelerated a trade, technology, and capital war between the US and China, according to Michael Howell, CEO of CrossBorder Capital. 

    “There’s an awful lot of liquidity being poured in, but I think the real tension upcoming is not just trade wars but capital wars,” Howell said in a Tuesday interview with CNBC. “We’re in a world where capital wars matter.” 

    Tensions between the US and China have been in the spotlight again amid the coronavirus pandemic. The US said Sunday that it would likely place sanctions on China for implementing a new security law on Hong Kong

    But beyond those sanctions, Howell said that the US is making efforts to contain China. Recently, the Federal Reserve expanded its dollar swap lines to more central banks, allowing them access to dollar funding amid the coronavirus pandemic. 

    Read more: A Wall Street chief strategist analyzes 4 recessions throughout history to explain why investors should still be buying stocks — even as the economy hurtles into depression

    “The decision to share dollar swap lines with 14 other nations, effectively forming a de facto group of 15 countries, including America, that have access to dollars, that is a critical development,” Howell said. 

    He added that the action is “the economic equivalent of NATO,” which was established to contain the Soviet Union militarily. 

    “This is trying to contain China economically,” he said. “There will be further salvos fired in this capital war, this technology war, this trade war.” 

    He continued: “Essentially, America and China are clear rivals and the coronavirus crisis has simply accelerated these trends.”