Has China become un-investable?

THE movements last month in China equity markets can be summed up by Lenin's quote: There are decades where nothing happens; and there are weeks where decades happen.

The last week of the month brought double-digit losses in China and Hong Kong equities, as China continued its crackdown on technology companies by focusing on Didi, causing a 23 per cent fall in a single day, just three days after its initial public offering. China also cracked down on the music licensing subsidiary of Tencent, causing a similar percentage loss. To top things off, the government announced a severe crackdown on for-profit education companies, banning them from making a profit and almost bankrupting the whole sector, which had been valued at over US$100 billion at the beginning of this year.

All of this wiped out US$170 billion in market cap for Tencent in July. Tencent has been the largest holding in the majority of Asian investors' portfolios over the last few years. One thing that all these affected stocks had in common is that they were all listed on US stock exchanges.