Investors may target some of the cheapest emerging markets and that includes Chinese stocks trading in Hong Kong, or A-shares, as FXI, GXC and MCHI all sport P/E ratios below that of the MSCI Emerging Markets Index. [Cheap EM ETFs]

A potential stumbling block for a recovery in Chinese stocks is sagging profitability at major Chinese banks.

“In the second quarter, profit at publicly listed Chinese banks grew only 1.7% from a year ago, the worst showing in a decade. The Big Four China banks saw virtually no profit growth, the 9 joint-stock banks’ profit grew only 4.4%. Only the 5 city commercial banks reported decent 14.1% profit growth. At 11% year-on-year, revenue growth was far more respectable. But much of that was boosted by strong fee income that came out of the stock market rally. Chinese banks saw 20.8% increase in net fee income and we can’t expect that to repeat in the second-half,” reports Shuli Rhen for Barron’s.

Financial services is usually the largest sector weight by a wide margin in China ETFs and that is the case with several of the funds highlighted here.

iShares China Large-Cap ETF