China's Market Risks Are Nothing New

China’s weight in emerging-markets ETFs is a concern, but deteriorating diversification is only one of the risks it presents

Daniel Sotiroff 18 November, 2021 | 11:22AM
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Beijing Opera house China

It wasn’t long ago that China’s market was promoted as a big investment opportunity. The narrative revolved around capturing the country’s astounding growth. A booming economy and rapidly evolving stock market were fertile ground for investment opportunities.

China’s market remains in the spotlight today, but for very different reasons. The central party hasn’t been bashful about meddling with some of the country’s publicly traded companies. Such circumstances aren’t new for emerging markets. Government actions have adversely affected stock performance in other emerging markets over the past decade, such as Russia and Brazil.

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Daniel Sotiroff  is an analyst, passive strategies research, for Morningstar