It may explain why FXI is down, but if you do not believe in the 'hard landing' scenario, then this is a GREAT time to load up on Chinese stocks.
FXI was up over 2% this morning on just the anticipation that China would ease - imagine what will happen when they do...
There is no way that a country sitting on $3 Trillion and with tight policies in place is NOT going to spend those reserves and ease their policy to fight any hard landing.
The Chinese 'five year plan' was recently revealed and they are going after alternative energy, heavy machinery (Joy Global & Cat & Deere), environmental protection, and biotech. Some of these are taking direct aim at some of the last bastions of high paid US jobs. Who is going to win the battle in the next 5 years? The Chinese are targeting increased spending in these areas while the US is cutting back. The Chinese graduate 10 PhD's in these areas for every one the US graduates. Hmmmm....