Various Chinese stocks are feeling the pressure Thursday morning following yesterday's meeting between President Biden and China's Xi Jinping at the APEC Summit in San Francisco. Wall Street is on edge.

Charles Schwab (SCHW) Chief Global Investment Strategist Jeffrey Kleintop joins Yahoo Finance Live to weigh in on additional factors that are contributing to dips in Chinese and China-exposed stocks.

Kleintop suggests that the Biden-Xi meeting might not have been the “big China news” that is moving stocks — it could be the upcoming Taiwanese election.

With increasing interest in relations with China, Kleintop notes a "reversing intellectual capital flow", where innovation and technology are coming from China to the West for the first time in recent business cycles.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Video Transcript

SEANA SMITH: It's great to see you here. So let's talk about some of the movement actually that we're seeing this morning because a number of Chinese stocks here under a bit of pressure following the meeting that we got yesterday between President Biden and President Xi. That nervous tone that seems to be coming out of Wall Street today, is that justified?

JEFFREY KLEINTOP: Well, I think stocks are showing some disappointment that there was no tariff talk at all. There was some thought that perhaps we might hear from the US, they might be looking to lower tariffs made on things like Chinese bikes sold at Walmart. But instead, increasing them on strategic business spending areas in an attempt to lower CPI without appearing to let up on China, but we didn't hear about any of that at all maybe pushing out the whole tariff discussion. And so I think there was a little bit of disappointment around that.

But I think more interestingly, maybe the Biden-Xi meeting wasn't the big China news this week that might be moving stocks. Taiwan's two main opposition parties decided, just before the meeting between Biden and Xi, that the Kuomintang, which is China's nationalist party in Taiwan and the upstart Taiwan People's Party, they both agreed to run on a combined ticket for January 13's Taiwanese presidential election. Together, the KMT and the TPP would likely defeat the ruling pro-independence Democratic People's Party in that election on January 13. Such a result would really please mainland China and defuse maybe China-Taiwan tensions. I think that's an interesting undercurrent to all of this, the idea that Taiwan may have just moved much more closer to China despite anything that could have come out at the Biden-Xi meeting.

BRAD SMITH: And so it's about the meeting, but it's also about the dinner that these CEOs were paying $40,000 to get a seat at the table with President Xi and get some of his attention knowing how much they needed to maintain favorability within that region as well for some of their own growth ambitions. How do they go back to their businesses, their investors and say that $40,000 was worth it?

JEFFREY KLEINTOP: Well, you're right. I mean, they'll have to come back with something. And I think this is the long game, right? We know China definitely plays a long game and so do the businesses working within China.

We did hear from-- I think it was just a week or two ago, we heard from Stellantis, which struck a $1.1 billion deal for a stake in China's Leapmotor. This is one of two recent deals between legacy auto giants and Chinese electric vehicle companies that really shows, kind of, a reversal in the flow of technology. We're used to Western businesses investing in China and then sharing Western technology with China. This is about the other way around, that there's actually some leading technology in China, particularly around self-driving vehicles, and batteries, and electric vehicle technology that the Western businesses want. And so we're actually seeing a back and forth there that's, kind of, interesting and maybe reversing the intellectual capital flow that we've been used to.