When China sneezes, much of Asia-Pacific catches a cold. Hong Kong-listed stocks and the ETFs that track those shares should see a doctor. Surprisingly, Hong Kong’s Hang Seng was trading slightly higher at the time of this writing, just after 2AM Eastern time Tuesday, although the Shanghai Composite was down 2.42%.

Earlier in the session, China’s CSI 300 Index plunged 5.1% to touch its lowest levels in over four years. Investors continue to bet that the People’s Bank of China will take measures to avoid a property bubble, indicating that the central bank is willing to sacrifice near-term appeasement of investors in riskier assets in favor of steady, sustainable long-term growth. In the wake of last week’s SHIBOR headlines, the PBoC said it sees “reasonable liquidity” in the Chinese banking, but investors are still shaken and those tremors could affect Hong Kong ETFs. [China ETFs Plunge After PBoC Comments]

The SHIBOR spike prompted concerns that the world’s second-largest economy is facing a liquidity crunch and partially explains why China ETFs heavy on bank stocks, such as the iShares FTSE China 25 Index Fund (NYSEArca: FXI), have incurred double-digit losses in the past month. The iShares MSCI Hong Kong Index Fund (NYSEArca: EWH), which allocates over 60% of its weight to the financial services sector, is down 11% in the past month and 7.1% in just the past week. [Hong Kong ETFs Down on China Data]

Making matters worse for the $2.2 billion EWH is news that did not get a lot of U.S. press Monday. Moody’s Investors Service lowered its outlook on Hong Kong banks to negative from stable.