China’s stock market and exchange traded funds (ETFs) continue to do well despite the subprime mess and credit crunch that seems to have affected almost every other market in the world. In fact, China’s stock market hit a record 5,000 today. The incredible surge in China’s A-share market, the class of shares available only to domestic Chinese investors, has boosted China to the No. 2 spot for global market capitalization, according to Matt Hougan for Index Universe. Although we can’t invest in the Class-A shares, there are Chinese ETFs for us foreign investors, including:

  • iShares FTSE/Xinhua China 25 Index (FXI) is up 22% for the last three months.
  • PowerShares Golden Dragon Halter USX China (PGJ) is up 8% for the last three months.
  • SPDR S&P China (GXC) is up 20% for the last three months.

While China’s immense growth is great for now, should China incur a rough patch like the U.S.’s subprime fiasco, it could lead to an even larger meltdown than what the global market is currently experiencing, reports Scott Jagow for American Public Media’s Marketplace segment. The wrath from a Chinese market drop likely would be much larger because it has become one of the largest forces in the global economy, especially when it comes to manufacturing.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.