It is no secret that China and its related exchange traded funds (ETFs) have been growing by leaps and bounds. So what is going on in China these days? The Chinese Communist Party is seeking to prevent the economy from overheating and restrain inflation.  Chua Kong Ho and Zhang Shidong of Bloomberg report the government plans to take measures to slow expansion in fixed-asset investment. Chinese and European leaders are meeting to discuss the trade imbalance between the two as well as the weakness of the Chinese currency, reports BBC News.

Even with several corrections the China ETFs remain above their 200-day moving average.  If you are looking to buy into China, be sure to have a stop-loss in place. While the ETFs are above their long-term trend line, they are off from their recent high set on October 31.

  • iShares FTSE/Xinhua China 25 Index (FXI) is up 58.5% year-to-date; 43.5% above its 200-day moving average and 19.4% off of its recent high.
  • SPDR S&P China (GXC) is up 70.1% since its March inception; 37.8% above its 200-day moving average and 19.7% off of its recent high.
  • PowerShares Golden Dragon Halter (PGJ) is up 52.7% year-to-date; 34.1% above its 200-day moving average and 17.2% off of its recent high.

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.