[quote=Running Bear]I don’t expect China to collapse. But they will have some serious pain ahead. The economy is based on exports and they are seeing their major buyers of their exports pulling back rapidly. They are already seeing lots of businesses and factories go under and people being out of work and we are just beginning to pull back here and in Europe. This time next year you will get a much better idea of how bad it will be for them. Playing a bounce on China is a fine for the day trade or short term. But the long term direction is still down.

You need to take my opinion with a grain of salt however because I think going long any equity market longer then to play market swings is a fool’s game. All of the equity markets for the next year will be heading south but with very violent bear market rallies to wipe out slow and weak shorts.

My2Cents[/quote]

Running Bear, I kind of feel this has been (at least partially) priced into the current stock market/ETF value. I can’t tell if this is the bottom of Chinese market or FXI, but I believe it is within 10% of the bottom. The reason that Chinese government came up such a financial stimulus package is that they are fully aware of their past economic dependency on export, and want to change that. This has been somewhat discussed and anticipated for at least a month. The government debt or bond should be bought greatly domestically as long as it yields a higher rate than bank, since their people save about 30% of their income in bank. As a socialism country, most of their banks are still majorly own by the government and people really don’t worry about bank runs.