Reports additionally forecast that 90% of Chinese newspapers would have digital editions by 2013. Perhaps it’s not an exaggeration to say that print media will move to mobile phones, especially when every other type of digital content already has.

However,  if you are investing heavily in Chinese ADRs (like me), then I am sure you feel even more depressed when looking at your stocks’ performances last month. Of the 82 Chinese ADRs I track regularly, only 6 of them ended the month in the positive territory. All other 76 stocks dropped, and they dropped like a rock: 30 stocks lost more than 20% and 10 more than 30%.

While the election mayhem has increased uncertainty surrounding the development of Ivanhoe Mines Ltd.'s (IVN) massive Oyu Tolgoi copper and gold mining project in the country, driving Ivanhoe shares down 3% in the process, Khan, who explores for and develops uranium properties in Mongolia, saw its stock climb 20% Wednesday to $1.24 on strong volumes.        

U.S. ECONOMIC TRENDS

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We have done background work on a number of Chinese security companies. While we find two of the companies, a leader in fire systems and the other, a leader in geospatial surveillance software, interesting in their own right, they are both much smaller than our focus in this blog – China Surveillance & Security (CSR) – China’s leading domestic security surveillance company, and our Chinese researches reiterate that this is the company to watch.

A-Power Energy Generation Systems, Ltd., formerly Chardan South China Acquisition Corp., through its PRC operating subsidiaries, is the largest provider of distributed power generation systems in China and will enter into China’s wind energy market in 2008. The Company is also focused on developing and commercializing additional renewable energy technologies

This company moved to the NASDAQ Global market on Jun 2, 2008, and is actually followed by a few smaller brokerage houses; therefore I can conclude it's not a complete scam .. something I worry about with any tiny far flung Chinese name. At a market capitalization of about $800M at today's prices, it's far smaller than our average fare and I believe either the 2nd or 3rd smallest current holding.

It is almost amazing the degree which Chinese stocks have fallen this year. While retracements aren't unusual after massive rallies, this correction suggests that the Chinese economy will come to a grinding halt. With that in mind, there is a chance the equities market in China is acting like a canary in a mine. More than likely the easy part is over. Chinese investors tapped billions of savings to fuel the rally and were joined by investors from around the world. Now it is going to be a more selective rally based on management competencies as well as potential. China is not immune to the inflationary pressures being felt all over the world, but the government has been able to grin and bear it in the past. The capitalism genie is out of the bottle and with it more freedoms and desires that should drive the nation higher.