Large cap Chinese stocks have been underperforming S&P 500 and under pressure for a long time and actually topped out in August of 2009 on fears of higher inflation, monetary tightening and hard landing.
This is most apparent in the chart of $SSEC, which has lower highs and lower lows since then - both weekly and daily chart does not look good. But even $FXI which tracks large cap China stocks listed in Hong Kong also has been practically flat since August 2009, while S&P up substantially since then.
China Small cap etf $HAO looks a bit better, but still up only just about 10% since August 2009.
Other emerging markets also have been generally weak since November 2010 while China is especially weak.
By the way, emerging markets (as well as commodities and commodity stocks) generally made a bear market bottom in late 2008 - in advance of March 2009 bottom in developed markets
Could you comment on this strong headwind and (short squeeze aside) do you expect China small caps to buck the trend and go up even if large caps remain under pressure.
