With Chinese stocks looking at an unprecedented fourth consecutive losing year, even some of Wall Street’s most conspicuous China bulls are throwing in the towel.

Over the past two weeks, long-standing China bulls UBS Global Wealth Management, Nomura Holdings, and JPMorgan Chase have all downgraded the country’s stocks. And there’s a growing consensus that China will fail to meet its economic growth target of around 5% this year.

The money NOT flowing into China has made this a good year for stocks in India, Japan, and Taiwan.

I think the real danger here is that the decline in Chinese equities could lead to more money leaving China’s markets, which would make a further drop in China’s markets a self-fulfilling prophecy

The CSI 300 Index, the benchmark index for China’s on-shore stocks is down almost 7% this year, falling to levels not seen since 2019. If 2004 finishes in the red in 2024, it would be an unprecedented fourth annual drop. The MSCI Index of Chinese stocks is heading for its longest stretch of underperformance versus global equities since the turn of the century. A 16% rally in February through May evaporated during a dismal earnings season.

In contrast other Asian markets are turning in a strong 2024. On February 9, 2024, I made the Franklin FTSE India ETF (FLIN) the non-U.S. equity pick in my Perfect 5 ETF Portfolio on my subscription JubakAM.com site. That ETF is up 13.63% since that pick as of the close on September 10.