CNBC reports that the coronavirus pandemic might have peaked, but the political fallout from it is just picking up pace and investors are getting very worried, said an economist.

"The virus situation (has) already peaked," according to Zhiwei Zhang, president and chief economist of Pinpoint Asset Management. "On the margin, it's gradually improving. There are always concerns about a second wave (but) as long as the general public as well as the governments are aware of that risk, the risk is contained to some extent," he told CNBC.

However, political risks and U.S.-China trade tensions "look like something that will pick up," Zhang said. "That's probably the number one concern in the market when we talk to investors and sell-side analysts."

Zhang pointed out that these tensions are likely only in their early stages.

It comes just six months before the U.S. presidential election, and amid signs that U.S. officials may be ratcheting up pressure on Beijing, he said. "We already started to see some signs of escalation over the last few days (with) the U.S. side pointing fingers to China," Zhang added.

These tensions will hit the currency market and the Chinese yuan could weaken in volatile trade, he said.

Zhang said the market is very concerned about the current U.S.-China dispute over the origins of the virus, which was first reported from the Chinese city of Wuhan.