Chinese stocks are lost

On 24 December 2021, the China Securities Regulatory Commission (CSRC) solicited opinions on the new rules on overseas listings. Some experts said that the tone of the system releases goodwill and allows all parties in China to take a "reassuring pill". But more than 200 Chinese companies are still at risk of delisting, and they will be forced to embark on a road of re-selection

Photo/Visual China

Text | "Finance" reporter Zhang Xinpei, Wang Ying, Feng Yiying

Edit | Lu Ling

On January 4, 2022, a number of popular Chinese stocks fell, such as Lujin Holdings (LU.N) fell 13.6%, Pinduoduo (PDD.O) fell 11.2%, Lujin Holdings (LU.N) fell 13.6%, Futu Holdings (FUTU.O) fell 11.1%, Shell (BEKE.N) fell 10.6%, Bilibili (BILI.O) fell 8.9%, JD.com (JD.O) fell 6.0%, and so on. The China Overseas China Internet 50 Index hit a new low in the past two years.

At the end of March 2021, Bill Huang, a well-known fund manager on Wall Street, exploded due to the sharp decline in Chinese stocks, losing tens of billions of DOLLARs, creating "the largest one-day loss in human history". At the end of 2021, investor Zhu Xiaohu said in the circle of friends, "Where Bill Huang is blowing up, it is simply a top escape." ”

Since mid-February 2021, Chinese stocks have been on the way down, with their market value falling, experiencing multiple plunges. The reason for the sharp decline in Chinese stocks is due to the landing of the SEC Foreign Company Accountability Act and its implementation rules in the United States, as well as the impact of China's strong domestic supervision and the performance of Chinese stocks themselves that are less than expected.

According to the implementation rules of the U.S. SEC Foreign Company Accountability Act of December 3, Chinese stocks that do not meet the conditions will be delisted from the U.S. stock market within three years.

The sword of Damocles, which hangs above the Chinese stock market, has finally fallen, which has also put hundreds of Chinese stock companies in trouble. "From the current point of view, if you do not submit the manuscript, you will be delisted, and there is no choice for this." At present, there is very little room for manoeuvre. Industry insiders told the "Finance" reporter.

On the domestic side, strong supervision continues to land. Internet anti-monopoly since the fourth quarter of 2020 has continued to advance in 2021. In July 2021, the national "double reduction" policy landed, and the education and training industry was in mourning. The continued pressure of domestic policies has made it extremely prudent for companies to go overseas.

But there are still opportunities for turnarounds.

On 24 December 2021, the China Securities Regulatory Commission (CSRC) promulgated the Administrative Provisions of the State Council on the Overseas Issuance and Listing of Domestic Enterprises (Draft for Solicitation of Comments) and the Administrative Measures for the Issuance of Securities and Listing Filings by Domestic Enterprises Abroad (Draft for Solicitation of Comments), soliciting public opinions on the new rules on overseas listing and improving the regulatory system for the overseas listing of domestic enterprises.

"Improving the system is not a tightening of regulatory policies for overseas listings. The direction of expanding opening up will not change, and the attitude of supporting enterprises to make good use of the two resources will not change. The relevant person in charge of the CSRC said in response to a reporter's question that VIE structure enterprises that meet the compliance requirements can also go overseas for listing after filing.

Especially in terms of cross-border supervision, the CSRC said that on the one hand, it clarifies regulatory responsibilities and strengthens regulatory coordination. On the other hand, we will improve cross-border securities regulatory cooperation arrangements. Establish a filing information notification mechanism with overseas securities regulators, strengthen cross-border securities regulatory law enforcement cooperation, and jointly crack down on cross-border violations of laws and regulations.

Some experts said that the overall tone of the relevant institutional arrangements for overseas listings has released goodwill and played a role in stabilizing market confidence. In view of some issues that the market is concerned about, the relevant parties in the Chinese stock market are given a "reassurance pill".

But the crisis of Chinese stocks remains. Some Chinese stocks who did not want to be named told the "Caijing" reporter that in the past year, most of the Chinese Internet companies listed in the United States have experienced great shocks, which is related to the overall environment. The tension in the political relationship between China and the United States will definitely affect the Chinese stock market.

Chinese stocks are still in a whirlpool, the risks have not receded, and they will be forced to embark on a path of choice.

The Sino-US Securities Regulatory Game

In November 2021, Rule 6100, enacted by The Public Company Accounting Oversight Board (PCAOB), was gazetted in the U.S. Federal Government Gazette and has taken effect immediately.

Under Rule 6100, a foreign business listed in the United States is required to issue instructions to its auditor that it must be subject to PCAOB inspection of the audit work, otherwise the foreign company may not be listed on U.S. stock exchanges or place orders on the closed market.

On December 2, 2021, the U.S. Securities and Exchange Commission (SEC) announced final amendments to the regulatory rules implementing the Holding Foreign Companies Accountable Act ("HFCAA").

In contrast to the previous exposure draft, the final amendment clearly stipulates that the PCAOB cannot effectively carry out audit inspection work for three years from fiscal 2021, and adds a requirement for companies to disclose whether they use the VIE structure.

The bill was ultimately settled beyond market expectations. Pang Min, chief economist and chief strategist of Huaxing Securities, believes that the relevant rules, specific details and implementation plans successively announced by the SEC and PCAOB have continuously completed the details, roadmaps and timetables for the implementation of compulsory delisting of listed companies in the United States that do not meet the requirements for material submission and information disclosure.

How many Chinese companies will be affected? According to information published on PCAOB's website in late 2018, 224 U.S.-listed companies are located in jurisdictions where its inspections are barriers. About 200 of these companies have auditors in China.

However, for listed companies, the mandatory trading ban will only take effect after PCAOB has identified it as an "identified company" for three consecutive years.

A Chinese-listed corporate person held a relatively optimistic attitude, "HFCAA is a common situation faced by Chinese listed companies in the United States and listed companies that intend to go to the United States, and it is a new problem and new challenge that needs to be faced." However, the actual implementation of this bill may not be until 2024, which also leaves enough time for the securities regulators of the two countries to propose a solution. ”

Although there are two years of buffer time, lawyer Liu Zhiping, a partner of Chengmei Law Firm in the United States, told Caijing that the Foreign Company Accountability Act is already a law, and the game space for negotiation is small, "This problem is not just a matter that the executive department can make a decision on the Sino-US negotiating table." Any negotiated compromise to change the express provisions of the bill would require Congress to amend the law."

In fact, regulators in China and the United States have been discussing and cooperating on the listing of Chinese companies in the United States and the audit of the working papers. The China Securities Regulatory Commission said that for the PCAOB in the United States to require entry inspections of Chinese accounting firms registered in PCAOB, the cooperation between the two sides has never stopped, and it has been looking for an inspection plan that is acceptable to all parties.

At the beginning of 2020, the CSRC said that under the framework of cooperation such as the International Organization of Securities Regulatory Commissions (IOSCO) Multilateral Memorandum, the CSRC has provided 23 overseas listed companies with audit working papers to a number of overseas regulators, including 14 to the US Securities and Exchange Commission (SEC) and the US PCAOB.

"The CSRC believes that PCAOB's demand is completely reasonable, since Chinese companies are listed in the United States, they must abide by the rules of the United States, but PCAOB inspection of Chinese accounting firms also needs to comply with China's rules and comply with China's national security and information security requirements." In the past four or five years, the two sides have made great progress in joint exploration, but after the change in the us political atmosphere, Sino-US cooperation has declined. Fang Xinghai, vice chairman of the China Securities Regulatory Commission, said.

The Draft for Comments also proposes that where overseas securities regulatory authorities investigate and collect evidence on the overseas issuance and listing of domestic enterprises and related activities, they may submit a request for co-investigation to the securities regulatory authority under the State Council in accordance with the cross-border supervision and management cooperation mechanism.

"The CSRC will further promote the improvement of cross-border securities regulatory cooperation arrangements with securities regulators in major overseas markets." Establish a filing information notification mechanism with overseas securities regulators, and strengthen the sharing of overseas listing regulatory information. The relevant person in charge of the Securities Regulatory Commission said.

China has been actively promoting cross-border supervision and cooperation, but industry insiders pointed out that under the tense political environment between China and the United States, cooperation may be difficult. However, we are looking forward to more cooperation between the United States and China in cross-border audit supervision. "Whether cross-border regulation is progressing depends on the U.S.-China relationship." A senior investment banker said.

Foreign Ministry spokesman Zhao Lijian said at a regular press conference on December 3 last year that China has always believed that strengthening dialogue and cooperation is the right way to solve the problem. Politicizing securities regulation to the detriment of others will deprive U.S. investors of the opportunity to invest in many of the world's fastest-growing companies, and will also deprive U.S. professional services institutions of many business opportunities.

"There may be room for improvement in the future, but both sides need to go in the same direction." This requires communication efforts on both sides, not unilateral efforts. Liu Junhai, director of the Institute of Commercial Law of Chinese Min University, told caijing reporters.

Pang Min believes that the negotiations between the relevant parties on cross-border regulatory law enforcement cooperation are still expected to achieve results acceptable to both countries, such as meeting the PCAOB's requirements for regular inspection of accounting firms listed in the United States, making the proportion of random inspections of annual inspection activities in line with PCAOB's inspection requirements, and allowing the SEC to obtain audit working papers kept in the Chinese mainland to meet the timeliness of investigations.

Establish an overseas listing filing system

Not only is the Sino-US policy game facing cross-border supervision, but also the strong regulatory policies from China also constitute a major challenge that Chinese stocks have to face.

Didi, the Chinese travel giant on par with Uber, triggered strict government regulation including app removal and suspension of registration for new users after its listing on the New York Stock Exchange in June 2021. Under heavy pressure, Didi's market value has plummeted. According to the latest data, Didi's total market value is $30.6 billion, down more than 60% from its highest point at the beginning of the listing.

Behind Didi's strong supervision and investigation is the consideration of data security at the policy level. Less than two weeks after Didi's forced listing (July 10), the Cyberspace Administration of China issued the Measures for Network Security Review (Draft Amendments), which stipulates that operators with more than 1 million users' personal information must apply for a cybersecurity review before going abroad for listing.

Affected by the Didi incident, Chinese stock companies such as "full of transportation", "truck gang" and "boss direct employment" were launched to conduct network security reviews.

Some Internet companies awaiting listing have also suspended their applications to list in the United States. Keep, Himalayas, Little Red Book, Lalala and many other companies have reported the suspension of listing in the United States.

In view of the supervision of data security, coupled with the anti-monopoly of Internet companies that has been continuously promoted since the fourth quarter of last year, Chinese stocks have suffered a general sharp decline since the second half of 2021.

Coincidentally. The "double reduction" policy has brought a major blow to the Chinese stocks in the education and training industry.

On July 23 last year, the General Office of the CPC Central Committee and the General Office of the State Council issued the Opinions on Further Reducing the Burden of Homework and Off-campus Training for Students in the Compulsory Education Stage. The Opinions point out that discipline-based training institutions are not allowed to be listed for financing; all localities will no longer approve new discipline-based off-campus training institutions for students in the compulsory education stage; and existing discipline-based training institutions will be uniformly registered as non-profit institutions.

U.S. stocks closed on the day, and among the top ten stocks that fell, education stocks occupied nine seats. Good Future (TAL.US) fell by 70.76% on the day, Gaotu (GTOU.US) Group fell by 63.25%, and New Oriental (EDU.US) also fell by 54.22%. Worry-free English, Youdao, Ruisi Discipline English and other declines all fell by more than 40%.

Under the background of harsh policies, education stocks have become the worst performing sectors of Chinese stocks. According to Wind statistics, education stocks accounted for seven of the top ten Chinese stocks that fell in 2021.

But it is not only external factors that make Chinese stocks embarrassed, but the performance in the third quarter was less than expected and it suffered a round of selling pressure. The disclosure of the third quarterly report has once again caused a collective setback for Chinese stocks. In the disclosed quarterly report, the performance of Alibaba, Station B, Pinduoduo, Baidu, iQiyi and so on was less than expected.

Antitrust, data security, education "double reduction" policy, and even the cross-border supervision of the US SEC on audit papers, Chinese stocks have suffered one unknown blow after another, coupled with the lack of growth of their own expansion, Chinese stocks are walking on thin ice.

However, in the newly released draft for comment, the CSRC clearly gave a negative list and regulatory red lines.

At the same time, the CSRC has also listed a "negative list" for overseas listings, clarifying the regulatory red line: for several situations where laws and regulations explicitly prohibit listing financing, threaten or endanger national security, there are major ownership disputes, and there are illegal and criminal acts, it is clear that it is not allowed to go overseas for listing. No additional thresholds and conditions are set to support domestic enterprises that comply with the law and use overseas capital markets for financing and development.

At the same time, it is clarified that domestic enterprises issuing and listing abroad shall strictly abide by national security laws and regulations and relevant provisions such as foreign investment, network security and data security, and earnestly perform their national security protection obligations. Where security reviews are involved, relevant security review procedures shall be performed in accordance with law. The relevant competent departments of the State Council may require the divestiture of domestic enterprises' businesses and assets or the adoption of other effective measures to eliminate or avoid the impact of overseas issuance and listing on national security.

The direct overseas listing of domestic enterprises has been changed from the original administrative license to filing management, and indirect overseas listing has also been included in the scope of filing management.

Some insiders said that these new regulations have further standardized the overseas issuance and listing behavior of enterprises, so that enterprises have evidence to rely on in the process of overseas issuance and post-listing management, which is conducive to avoiding various chaos from the source, greatly reducing uncertainty at the policy level, and helping to protect the interests of market participants such as issuers and investors to the greatest extent.

"The attitude of the CSRC and relevant competent departments to respect the independent choice of listing place by enterprises in accordance with the law and compliance is consistent and clear, and the attitude of supporting enterprises to make good use of the two resources will not change." Improving the overseas listing supervision system and setting up 'traffic lights' for enterprises' overseas listing activities will provide clear, transparent and operable rules for the market and build a more mature, stable and predictable institutional environment." The relevant person in charge of the Securities Regulatory Commission stressed.

A retreat for Chinese stocks

Although China encourages compliant companies to go overseas for financing, the SEC Foreign Company Accountability Act in the United States still puts most Chinese-listed companies at risk of delisting. For them, there is still about two years to seriously evaluate their listing options.

Judging from past cases, there are generally three ways to delist Chinese stocks: privatization and delisting, transfer to other trading markets for listing, and transfer to the OTC market after delisting.

Both Hong Kong stocks and A-shares are likely to become an option for the return of Chinese stocks, because the business model of enterprises is easier to understand by investors, and enterprises are also likely to obtain higher valuation levels. The Hong Kong stock market is considered the first choice.

The aforementioned Chinese stock holders who participated in the second listing of Chinese stock companies returning to Hong Kong explained three reasons for choosing the Hong Kong stock market, "First, Hong Kong is one of the most important financial centers in the world, and the secondary listing on the Hong Kong Stock Exchange will provide us with another overseas financing platform in addition to the US stock market; second, it will help the market understand the company's business and share the growth results and future development strategies of china's Internet with Chinese investors." The third is to enhance the overall liquidity of stocks: the fungibility between the US and Hong Kong markets will provide investors with an uninterrupted trading window, thus ensuring healthy liquidity. ”

Pang Min told caijing that for stocks in the United States and China, compared with the A-share market, it is expected that due to the needs of overseas financing, the investor base, the supervision of the industry, the convenience of red-chip and VIE structure listing, and the continuous innovation of the Hong Kong stock market, the priority listing place at this stage will still be Hong Kong stocks.

"Hong Kong stocks are the first choice, not a question of the difficulty of listing, but a problem of the difficulty of exiting foreign investors." Some investment bankers told the "Finance" reporter bluntly.

Some private equity people have issued a paper saying that since the US Congress has this proposal, most Chinese stocks have left a good way to retreat, applying for a secondary listing in Hong Kong, "After completing the secondary listing in Hong Kong, in case of withdrawing from the US stock market, the funds do not have to sell their shares because of the company's delisting, and all the stocks can be transferred to the shares of Hong Kong stocks through brokerages." This is also the reason why Chinese stocks have been listed for the second time in Hong Kong in the past year or so."

"Because of Sino-US relations, it is expected that there will be an accelerating trend for companies returning to Hong Kong to list next year." Qianjia Zhang, Co-Head of Equity Capital Markets at UBS Asia, said. Tsai Hua, a partner at Cork and head of Asia's capital markets practice, said it was recommended that Chinese companies already listed in the United States should consider seeking a second listing in Hong Kong or double major listing.

On December 14 last year, Jin Hongyi, head of UBS Asia Pacific Investment Banking Department and President of China, said in an interview, "There are currently 240 Chinese-listed companies listed in the United States, with a total market value of HK$9.2 trillion, of which 17 companies have completed secondary listings in Hong Kong, accounting for 69% of the market value of these companies, so from the perspective of market value, a large part of the problems have been solved." There are also more than 50 companies that are not listed in Hong Kong but comply with the listing regulations in Hong Kong, accounting for about 30% of the total market value of Chinese stocks. ”

The Hong Kong Stock Exchange is also sparing no effort to attract the return of Chinese stocks.

In November 2021, the Hong Kong Stock Exchange announced the relaxation of the second listing requirement, eliminating the requirement of "innovative industry companies", and lowering the minimum market capitalization threshold, which only needs to be listed for five years and have a market value of 3 billion yuan, or two years of listing with a market value of 10 billion yuan. The new cases take effect on 1 January 2022.

"Under the new rules, secondary or dual major listings in Hong Kong will be more flexible and convenient." Pang Min said.

At present, there are three ways for Chinese-listed enterprises to return to Hong Kong for listing: first, applying for listing in Hong Kong after privatization and delisting is basically equivalent to a complete new stock IPO; second, while retaining the listing status of US stocks, apply for a major listing in Hong Kong, that is, dual main listing; third, while retaining the listing status of US stocks, apply for secondary listing in Hong Kong. Among them, the secondary listing is relatively simple and convenient, and has become the mainstream choice for the return of Chinese stocks.

If an enterprise is only secondarily listed in Hong Kong, the Exchange expects that the Company's securities will be traded mainly on overseas exchanges and subject to the supervision authorities of the major places of listing, and will adopt relatively relaxed review standards for applicants, and there are a number of exemptions and preferential policies. Compared with secondary listings, the requirements for dual primary listings are more stringent and the procedures are more complex, and the rules that are subject to them are almost the same as those for companies with initial public offerings of shares in Hong Kong.

However, for the Hong Kong stock market, there are also people in the industry who hold different views. Compared with the US stock market, the Hong Kong stock market has a small amount of funds, insufficient liquidity, serious polarization of stocks, and some small and medium-sized market value stocks have even become "fairy stocks" and "zombie stocks", and the tolerance for new economy enterprises is not as high as imagined.

In this regard, Pang Min believes that this statement has a certain truth, but from the perspective of development, the liquidity and investor structure of the Hong Kong stock market need more mainland investors and southbound funds to participate in and improve.

He also reminded that so far, many secondary listed stocks in Hong Kong, led by Alibaba, have met the objective criteria for the scope of Hong Kong Stock Connect stocks listed by the Shanghai Stock Exchange and the Shenzhen Stock Exchange, but none of them have been included in the scope of investable targets of Hong Kong Stock Connect stocks. The inclusion of these leading companies in specific industries in the Hong Kong Stock Connect will have a strong siphon effect on southbound funds.

As for the differences between the Hong Kong stock market and the US stock market, the Chinese stock companies listed in the two places have the most say. The above-mentioned Chinese stock related people believe that the Hong Kong stock market and the US stock market have common points, such as information disclosure, regulatory requirements, protection of investors, etc., but the difference is also relatively large, the liquidity of the US stock market is the best in the world, with a wide range of investor structure and foundation, flexible market mechanism; in comparison, the proportion of retail trading in Hong Kong stocks is relatively high, and the number of Internet sectors and emerging enterprises listed on Hong Kong stocks is also less than that of the US stock market.

In the United States and China stocks stand at a fork in the road of fate, on the other hand, for those companies that intend to go public in the United States, how to choose?

"The SEC's new regulatory rules have little impact on Chinese stocks that can return to Hong Kong for secondary listing. The real impact is on companies that want to go public in the United States, and I think it should be especially small and medium-sized innovative companies. The advantage of the US stock market is that it has extremely high financing efficiency and pricing power for emerging industries, but under the relevant regulatory policies, platform-based big data companies may give priority to Hong Kong. The investment banker said.

Pang Min believes that under the uncertainty of supervision, it is still attractive to go public in the United States for enterprises in the pharmaceutical and biological industries, manufacturing and traditional consumer industries that are small in scale and involve little data.

"If Chinese stocks choose To initially list or second list in the Hong Kong stock or A-share market on a large scale, it will put some pressure on the primary market and secondary market performance of the US stock market." U.S. investors will also miss out on a rare opportunity to share in the value added of China's economic growth and the growth of China's new economic constituents. Pang Min said.

Xia Chun, managing director of Noah Holdings and chief economist of the group, believes that for the proposed listed company involved in data security, if it is listed in the future, it will be subject to stricter supervision, and it is a win-win choice to transfer to Hong Kong for listing.

For Chinese stocks facing the risk of delisting, A shares are also a potential listing place. A shares under the registration system have also greatly improved their attractiveness to enterprises. For example, the science and technology innovation board allows the listing of red-chip structures, loss-making and other enterprises, which will attract some high-quality new economy enterprises to develop in domestic financing.

Market funding divergence

Compared with the dismal 2021, the Chinese stocks in 2020 have also made investors make a lot of money.

Ran Lu (pseudonym) remembers that at the end of December 2020, when she posted more than 40% of the annual return of her US stock account in the investment community, someone commented, are you speculating on Chinese stocks? After giving a positive reply, the other party ridiculed, then your yield is a little too low.

It is not uncommon for investors in 2020 Chinese stocks to double the market value of their accounts. In 2020, KraneShares CSI China Internet ETF, a part of Krane Shares, which tracks CSI Overseas China Internet Index, holds shares in 53 U.S.-listed Chinese technology companies with a 2020 yield of nearly 58 percent.

Investors in 2021 weren't as lucky. The once-rapidly growing market capitalizations have fallen back like a roller coaster. Ran Lu's Chinese stock holdings have already fallen off all of their earnings in 2020.

KWEB announced by Jinrui Fund in the three-year period from 2019 to 2021, if the initial investment of $10,000 growth chart shows that the current net value of the fund has fallen back to two or three years ago, which basically reflects the overall situation of Chinese stocks.

The continued tightening of U.S. audit regulations on Chinese stocks and the Chinese government's strong regulation have left international investors deeply divided over the future of Chinese stocks. There are funds that are determined to leave the market, and there are also funds that are bottoming out against the trend.

The data shows that in 2021, BlackRock and Berkey have reduced their holdings in Alibaba. BlackRock's 13F report disclosed on November 10 last year showed that it sold 6.8786 million shares of Alibaba in the third quarter; Berkey also significantly reduced its holdings in Alibaba in the third quarter, with a reduction of 61.23%.

Bulls are also entering the market. On November 11, 2021, Goldman Sachs Group submitted a 13F report to the US Securities and Exchange Commission (SEC) showing that it had increased its holdings in a number of Chinese stocks such as Alibaba and New Oriental in the third quarter. Bridgewater, the world's largest hedge fund, has also aggressively increased its positions in Alibaba and Pinduoduo.

Duan Yongping, known as "China's Buffett", favors Chinese stocks. According to Duan Yongping, in early December last year, Duan Yongping successively "bought" Pinduoduo and New Oriental by selling short options; previously, he revealed that he had twice shot tencent in 2021.

In fact, in addition to institutional investors, some individual investors at home and abroad are also continuing to increase their positions in Chinese stocks, according to Bloomberg data, in 2021, overseas listed Chinese stock ETFs have attracted a net inflow of $21.93 billion. KWEB, the largest U.S.-listed Chinese stock ETF, has attracted a large inflow of capital this year, reaching about $8 billion, the data shows.

The E Fangda Overseas Internet ETF, which tracks the China Overseas China Internet 50 Index (H30533), has a fund share increased by more than 100% compared with the end of June last year, an increase of more than 6 times, starting from 2.68 billion in early 2021.

However, from the perspective of the market game, the bears have a greater advantage.

In October 2021, there was a brief rebound in Chinese stocks, which once triggered a discussion on bottoming out Chinese stocks. The bearish situation soon struck, and the SEC announced on November 5 that the PCAOB had completed the development of Rule 6100. Chinese stocks bid farewell to the rebound and restarted the downward process. In the three weeks from November 12, 2021 to December 3, 2021, the total market capitalization of Chinese stocks fell by 13.5%.

At present, Chinese stocks are still in a downturn, and the China Overseas China Internet 50 Index hit a new low in nearly one year on January 4, 2022. The latest bearish is the Release by the Federal Reserve, with the dollar Taper and the upcoming rate hike in 2022 widely seen as detrimental to tech valuations.

The market is still divided. Some institutions are still bullish on China's growth story, such as JPMorgan Chase; but most investors still choose to sell or wait and see.