Though initially considered a stock market correction as stocks plummet, many investors would rather not find out whether there's going to be a crash. They'd rather lose whatever they've already lost before they lose a lot more as stock prices keep creeping down. Optimists believe that before there's a crash, the Chinese government will intervene. Is this a good enough reason to hold onto "Chinese stock?"
I would just be careful and not have too much money invested in any one region - particularly in a place like China that is so rife with corruption, poor quality controls, a govt that can take over a business whenever they feel like it, etc. I'm not saying don't invest in Chinese companies at all, just that I wouldn't invest too much there.
I wouldn't be too sure about government intervention to be honest. It's all very well saying that a crash won't happen, but are you going to be prepared to hope for the best and rely on the government to bail the market out? Investors are already starting to panic and with good reason. That isn't helping the situation but at a time like this, everybody needs to keep a very close eye on the way things are going.
I sold half of my holdings in a China ETF about three weeks ago. It sounds like I was incredibly insightful and managed to call the top of the market. Actually, it's an ETF I bought in 2007-08, which I should have sold almost immediately but I held onto it and watched it crash. I wasn't back in the money until earlier this year. So I wasn't going to make the same mistake again. Unfortunately, I just wish I had sold it all.
USD/CHY almost near 52 week low, another side India, Taiwan, Japan markets are well balanced according to currency based FII investments. Chinese markets and CHY both are in extreme positions. Right time to buy is far ahead.
Just my thoughts... China's economy is so big that anything drastic that happens to it will certainly affect other countries. We import cheap good from China and that implosion will have an effect on those traders in the center of Manila - they are the ones selling cheap goods from China, so cheap that local goods have surrendered in competing. I am not an economist, don't be mistaken. As I said, just my thoughts on the topic.
