China has been in a prolonged bear market as its property bubble burst and concerns over Europe’s debt crisis continue to punish the country which is highly dependent upon exporting goods.
The world’s second largest economy was one of the worst performers in 2011 as investors sold out of all emerging markets on a significant deflation scare. [China ETFs Hit by Hard Landing Fears]
However, just because something has gone down doesn’t mean it isn’t a good investment.
A rising price ratio means the numerator/FXI is outperforming (up more/down less) the denominator/SPY.
Notice that China relative to the U.S. peaked around August of 2009 – a long long time ago. Since then, the ratio has been in a long downtrend, underperforming U.S. markets and significantly.