The downturn in China ETFs and other emerging markets this month is a warning sign for the health of the global economy.

The iShares FTSE China 25 (NYSEArca: FXI) is in negative territory for the year, and is down about 20% from the February high.

“What was once world’s economic engine is sputtering, at least as far as the stock market is concerned. The benchmark Shanghai Composite in China just broke support and dropped to a 42-month low,” writes Michael Kahn for Barron’s.

“Technicals from trend to momentum look weak. At this rate, the lows seen at the end of the last bear market in 2008 are well within reach,” he said. [ETF Chart of the Day: China]

The weakness in Chinese ETFs is worrying because of the country’s importance in the global economy. [China ETF Performance is ‘Red Flag’]

The Shanghai Composite fell into bear market territory earlier this week, down 20% from one year ago, Yahoo Finance’s Breakout reports.

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