Nervous China market participants have been too eager to sell

ON ASIA

Martin Currie's James Chong explains why the recent corporate governance issues in China are not shaking his conviction.

As if slowing growth and rampant inflation were not enough for investors in China this year, allegations of accounting malpractice at a couple of overseas-listed Chinese firms have added further clouds to an already gloomy sky. The companies in question, the Canadian-listed Sino Forest and the US-listed Longtop Financial Technologies, certainly have questions to answer. But fears of widespread problems with corporate governance have led to a dramatic sell-off in overseas-listed Chinese stocks. Small-cap stocks have been hit particularly hard. So, for multi-cap investors, the relatively m...