That’s right. Wokai is a charitable organization that microfinances small businesses,  just like what they do at Kiva. However, Wokai has a much focused group that it supports, the rural poor in China, on a much smaller scale. The recipients of loans through Wokai are those live in rural China who want to start their own family business or simply improve their quality of life.

How Wokai Works

Founded in 2006, Wokai works with its Field Partners to distribute loans from contributors to those who applied and are approved for loans and monitor loan repayment process. The following from Wokai website can give you a better idea on hwo Wokai works.

• Wokai’s due-diligence team visits, evaluates, and trains our microfinance Field Partners. Our Investment Committee must approve all new partnerships.
• Our Field Partners screen and select recipients in their local communities, then post their profiles on our website.
• Contributors browse through their profiles, and make tax deductible donations to fund their loans. These tax deductions are valid in the United States of America, per our 501(c)3 status.
• Wokai distributes this money to our Field Partner for allocation to recipients.
• Field Partners collect loan repayments from recipients, and send updates to Wokai about their progress.
• Once the loan is fully repaid, contributors may reinvest their contributions to help fund a new recipient’s loan.
• This cycle continues for three loan terms. Afterwards, contributions will be used by Wokai’s Field Partner as long-term loan capital.

Basically, contribution to Wokai is a tax deductible donation, not an investment that will give you a return. At the beginning, if you decide to become a contributor, you can select the recipient(s) you want to support and track loan repayment progress in your account. After three loan cycles, which I assume each loan cycle lasts one year, your contributions will be used solely by Wokai’s Field Partners who make the decision on whom to support and you will have no control on how the money will be used.

One of the biggest concerns when lending money to strangers, whether through peer-to-peer lending such as Lending Club or microfinancing such as Wokai, is what happens if the recipient fails to make repayment. Even though in the case of Kowai, there won’t be any monetary loss to the contributor as the money is donated, it’s still quite disturbing if the borrower doesn’t pay back the loan. At Wokai, they use a group guarantee program to make sure that each loan is fully repaid:

If a recipient at its institution is delinquent, the other recipients in her guarantee group must repay the recipient’s delinquent loan. If they fail to make the payment, then they will never be able to take out a loan again with the institution. This model is incredibly effective in rural areas of China where recipients have no other means of accessing credit.

From what I heard, this method works quite well because all group members share the responsibility of repaying the loan if one member fails to live up to his/her obligation. In one region, Wokai has distributed more than $10 million in loans with less than $5,000 delinquency.

How To Contribute

Contributing to Wokai is easy. You only need a user name and email address to register an account to become a contributor. Once the account is setup, you can use Google Checkout to purchase credit and use the credit to contribute right away (you do have to wait a few minutes for the Google Checkout purchase to go through). Loan amount starts as little as $10, with a $10 increment. Right now there are only 10 borrowers (one has already reached the funding goal), all form Chifeng, Inner Mongolia (two of my college classmates were from that area), so selecting whom to support is quite simple.

In my first contribution, I purchased $100 credit and used the money to support 5 out of 9 borrowers. Since this is the first time I deal with Wokai, I want to give it a little time to see how the process goes before making more contributions.

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December was a good month for investors, a rare good time in a miserable year. Without the December rebound in stocks, 2008 could have been a lot worse for many people when the receive their year-end statements from brokers and mutual fund companies. Most stocks gained in December, even though major indices ended the month mixed. For the month, the Dow Jones Industrial Average lost 0.6%, the Nasdaq  rose 2.7% and the S&P 500 added 0.8%. However, mainland China investors were not that lucky. The Shanghai Stock Exchange Composite Index declined 2.7% after rallying 8.2% in November. The Hong Kong Hang Seng Index, on the other hand, increased 3.6% following a small decline in November.

For Chinese stocks traded on U.S. exchanges, December also offered a little bit of relief to investors, even though 31 of 81 Chinese ADRs I track regularly still finished the month in red, with Ninetowns Internet Technology (NINE) led the way with a 26.89% decline (Hutchison Telecomm (HTX)’s 77.08% drop in share price is due to a special dividend on December 3rd), followed by Sina (SINA) -25.08%. The biggest winner of the month is Acron International (ATV), which saw its share surging nearly 140%. Semiconductor Manufacturing (SMI)’s stock also more than doubled in December.

Looking at the entire year of 2008, only one Chinese ADR had a positive return and that’s Netease.com (NTES) which gained more than 22%. Except a couple of stocks, the rest were down sharply for the year with 55 stocks losing more than half of the value. Among them, the worst performers in 2008 are:

• Las Vegas Sands (LVS): -94.25%
• Spreadtrum Communications (SPRD): -91.92%
• XinHua Finance Media (XFML): -89.67%
• China Southern Airlines (ZNH): -87.03%
• China Grentech (GRRF): -86.43%

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2009 is the Year of Ox (Bull?), one of the favorites among the 12 Chinese Zodiac animals. After seeing what happened in 2008, let’s hope a better 2009!

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Happy New Year To You All!

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After a brutal month of October, U.S. stocks showed no sign of life last month, despite slightly better results than the month before. For the month of November, the Dow Jones Industrial Average dropped 5.44%, the S&P 500 Index tumbled 7.48%, and the Nasdaq plunged 1.77%. Chinese stocks, on the other hand, traded on mainland exchanges rallied after the government announced a massive economic stimulus plan worth nearly $600 billion early in the month. The Shanghai Composite Index (^SSEC) gained 8.23% last month while the Hang Seng Index (^HSI) declined 0.58%.

As for Chinese ADRs, they were unable to join the party as their mainland counterparts were. Out of the 81 stocks I track (China Netcom (CN) was removed in October), only 16 of them ended the month in the positive territory, led by Huaneng Power (HNP)’s 37.43% gain. Other monthly leaders include Simcere Pharmaceutical (SCR) and Aluminum Corp of China (ACH). The biggest loser of the month was Las Vegas Sands (LVS) with a loss of 63.57%, followed by Focus Media (FMCN)’s 59.69%. YTD, no Chinese ADRs showed positive change in stock prices. The picture is as grim as it could be. If you are an investor in Chinese ADRs, it won’t make you happy

Two widely held exchange-traded funds (EFTs) investing mainly in China ended the month mixed. iShares FTSE/Xinhua China 25 Index (FXI) gained 5.68% in November while PowerShares Gloden Dragon Halter USX China (PGJ) had a decline of 7.00%.

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Well, the building in the picture is not an office building, or a museum, or a hotel. It’s a clothing factory! I know it noway looks like a factory, but it really is. When I first saw the building, I couldn’t believe that either. To me, it’s somehow a weird taste of style.

The building is the main facility of China Heilan Group. One of my friends is working for the company whose main products are men’s suits and shirts, and as you can imagine a large part of their products have been exported to countries in Europe and, of course, U.S., if some are under their own brands.

It’s a little different than what you may think of a clothing factory in China, isn’t it? I have never visited any other factory before, so I can’t tell you whether they are the same or different (I admit I am a little surprised too), but I am sure a sweatshop doesn’t look anything close to this. In fact, Heilan is one of the largest manufactures of men’s clothes in China. In 2007, the company had a revenue of RMB 16 billion (about $2.3 billion), very impressive for a private company

One thing my friend mentioned is that as the financial crisis here in U.S. spread to other countries, Heilan, like many other clothing and toy companies in China, also feel the pain. My friend, who’s envloved in sales, said he had quite a few canceled orders recently. Actually, the financial crisis is quite a big topic in China. There’s a 30-minute program every evening on one of the channel of CCTV (China Central TV) and my friends were asking me about it, no matter where they live.

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When in China, we traveled from north to west to east, visiting cities like Lanzhou, Suzhou, Shanghai, and Beijing (I still have some photos to share with you), meeting families and friends, and enjoying delicious foods. It was a long, but pleasant journey. Our children don’t even want to come back because they met so many new friends and it was so much fund for them to be there. But it’s time to get back to normal.

When we left for the trip, it was still summery weather here in New Jersey. Now leaves turned yellow and start to fall. It’s acutally quite cold here, but we are all gald to be back

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Before I get into the details, here’s a question I have for you. By just looking from the outside, can you guess what this building is? Is it

A) A museum?
B) An office building?
C) A hotel?
D) A factory?

The answer and more photos will come up shortly.

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The distance between Suzhou and Shanghai is about 75 kilometers, or 46 miles. When I went to Shanghai the last time two years ago, there was only regular trains between the two cities. Now, the high-speed train has reduced the travel time to under 30 minutes, less than the time we spent from my home to the train station

Our first stop in Shanghai is The Bund, the western bank of Huangpu River, where many buildings are currently occupied by China’s major banks. AIG (or AIA) also has a building on The Bund. The area west side of the river is the “old” Shanghai, before the development of the eastern side.

The eastern side, also known as Pudong (east of Huangpu River), is the “new” Shanghai and it’s where our destination is. From the above picture (smog is almost everywhere in China. In a sunny day, you can’t even see clearly the buildings right across the river), you can easily tell which one is the tallest building. What contributes to the bad air quality is that there are constructions everywhere in Shanghai as the city prepares for the World Expo in 2010, the moment Shanghai has been eagerly waiting for years, especially Beijing got its turn to host the Olympics this summer.

No, it’s not the 468-meter Shanghai Oriental Pearl TV Tower (OPT), which used to be the tallest building and landmark of Shanghai.

The title belongs to the newly completed Shanghai World Financial Center. At 492 meters, SWFC is 111 meters taller than the Empire State Building and 50 meters taller than the Sears Tower (excluding the antenna). The ticket office of SWFC is located at the basement of the building and the cost for going all the way to the top is RMB 150 (about $22), cheaper than going to the 102nd floor observatory of the Empire State Building. Given that the average monthly salary in Shanghai, which is one of the richest city in China, is about RMB 3,000, the ticket is by no means cheap.

The elevator first took us to the Sky Arena, located at the 94th floor, 430 meters above the ground. If you want to save few bucks (RMB 40, or about $6), you can stop here. BTW, the speed of the elevator is 8 m/s, so it didn’t take too long to go up 430 meters. Actually, I think the evevator is a little too fast because I felt a little bit uncomfortable during ascending. It’s even worse during decending.

Since we have come so far already, we want to go to the top, the observatory located at 100th so we can enjoy the view.

Including the view from the glass floor. A little scary?

From the observatory, everything around SWFC looks so small. The OPT tower, which is 468 meters high, is tiny, as well as the 421-meter Jin Mao Tower next to it.

Interested? Then come over and experience the world’s tallest observatory and the city yourself.

And for more pictures, check out my Flickr page.

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Exactly, one year ago on October 16, 2007, Shanghai Stock Exchange Composite Index closed at its all time high of 6,092.06 points. When 2007 began, the index was at 2,675.47, that should give you a sense how fast and how much Chinese stocks have gained last year. At that time, more than half of the 10 most valuable companies of the world were Chinese companies. The soaring stock market has attracted countless number of people into the stock market, many with their life savings. Then all the sudden, just like somebody flipped a switch on October 17, 2007, the Shanghai index started its long march south since then. In one year, the index has lost more than 2/3 of its value to close at 1,909.94 on October 16, 2008, leaving many people with nothing left, despite a successful Olympics and rescues from the government.

Like people always say, what goes up, must comes down. For Chinease investors, it just happened too fast.

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Lanzhou is the capital city of Gansu province, located in the northwest of China. The city is surrounded by several mountains such as Wuquan Mountain (where the above picture was taken), Baita Mountain, and Lan Mountain.

As the only major city in China with Yellow River running cross it, Lanzhou is taking advantage of it by setting up many parks and recration ares on the banks of the river. One of them is Waterwheel Park, which features giant waterwheels that can usually be seen along the Yellow River as part of the irrigation system.

One of Lanzhou’s famous foods is Lanzhou beef lamian noodle. The noodle got its name because it is made by pulling the dough by hands. How that can be done? I have no idea, but the noodle is delicious.

One of the unique artwares of Lanzhou is calabash with miniature carve. Beautiful, isn’t it? The listed price of those calabashes is RMB 600, or around $85, which is quite expensive for most Chinese. However, if you are a good bargainer, you can get it at a much lower price In China, you can tackle the price of almost everything.

Like many cities undergoing rapid modernization in China, Lanzhou is also facing the problem of pollution. Even in a good day, you can’t see too far in the city because of the smog. And the Yellow River that runs through the city is really a yellow river, not because of pollution but because of the mud that gets into the river

BTW, I noticed one thing that’s quite interesting when I was taking a cab. When the driver opened the trunk, I saw a big tank in there. Can you guess what it is? It’s a natural gas tank! It turns out that all taxies and buses in Lanzhou are running on natural gas instead of gasoline because the former is cheaper and more environmentally friendly than latter. But that’s not the case for private cars.

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Hot pot is very popular in China and you can find it in many restaurants in China all season long, not just when the weather is cold. I know there are a few Chinese restaurants in New Jersey serve hot pot in the winter, but the taste is just so-so. Actually, tastes of foods in most Chinese restaurants are not genuine (obviously). So every time we are in China, while relaxing and visiting family members and friends, one main task for us is to enjoy real Chinese cuisine and one of our favorites is hot pot.

At this restaurant we went last week, each one has his/her own pot, instead of big pot in the center of the table. In this way, we can each choose our own flavor.

Before ordering the main entry, we first got a cup of green tea, which is very popular in China, and a small bowl of chicken soup. In China, nobody uses teabags (like those Lipton teabags). Instead, we prefer to have the actual leaves in the cup. As you can see, it’s one cup of tea, but full with tea leaves.

You can put almost everything cook-able in the hot pot. Raw meat (beef or lamb, but not pork), fish, shrimp, vegetables, tofu, anything you can think of. Here our choice is beef. The beef, either lean or with a little fat, is sliced very thin, so thin that only a few seconds after putting it in the pot and stirring a little bit with chopsticks (after the meat turned from red to white), it’s ready to be served. That’s why we call it shuàn (more like rinse), not actually cook.

In addition to beef, we also ordered a few kinds of vegetables. Unlike beef, you can’t just rinse vegetables in the hot pot. They have to bee thoroughly cooked. Usually, we just put dump them in the pot and wait them to be ready. At the same time, we can just rinse the meat

Now, my hot pot is boiling and it’s time to enjoy the food. My choice of the hot pot stew is numb and spicy (má là) with lot of chili oil. Usually, the soup base isn’t just water. Most of the time, it’s made from chicken or pig broth for better taste. My wife had a seafood hot pot.

Since hot pot requires the minimum amount of preparation and cooking, eating at restaurants specializing in hot pot is usually cheaper than other restaurants. The total cost for this four-person meal is just RMB 160, or about $25. Not expensive, but sure delicious and tasty

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This is China’s third manned space mission in five years, which also includes its first ever spacewalk. As an Chinese I am proud of what the country has achieved in its space program (China also launched its first lunar probe last year). At the same time, I am also disappointed that a country can put men into the space has failed to guarantee the safety of the food for ordinary people. That’s a shame.

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I spent most of the day yesterday on the planes. First I asked a friend to drop me off at a local New Jersey Transit train station near where we live so I can take the train to Newark International Airport. Actually, it was the first time I took a train to the airport, so I have no idea how hard it could be when I also had to carry two pieces of luggage (my wife took the kids with her already).

Well, it turned out taking a train to the airport is very easy, even it was in the morning rush hours. The train first took me to Newark Penn Station where I transferred to another train on a different track. After only one stop, I got off the train at the airport station to take the Airtrain, a monorail connecting all three terminals of the airport. Ten minutes later, I was already checking in my luggage. Living 50 miles from the airport, I thought driving was the only option. Not so (since I don’t travel much, it took me until know to find out). The total time from leaving my home to arriving at the airport was less than two hours. Not bad at all. If I travel alone next time, I will just opt to take the train to the airport, instead of having my wife driving me there.

Then there came the hard part of this trip: the 13-hour flight from Newark to Beijing and the distance is longer, 7,292 miles, not 6,000 miles as I thought. We go back to China about every two years, but I never paid attention to the distance before. And before the only direct flight to China we had was from JFK in New York, until Continental won the right to serve this route three years ago. I heard that Continental is also bidding to provide daily direct flight from Newark to Shanghai. If it wins, it will save us a lot of time.  Airliners are reducing domestic flights lately to save money (and charge extra fees for every checked in baggage), but they are not cutting back flights to China. With a large Chinese community in this area (maybe the largest in the nation?), direct flight to China is a lucrative business. The plane is always full!

While I was waiting to board, I took this picture of the plane which was going to take me to Beijing.

And on the plane, I shoot this picture of the flight map. Instead of going west, the plane went north, going through Canada, Greenland, Russia, and Mongolia, before landing at Beijing Capital International Airport at 2:05 pm on September 24, local time (there’s a 12-hour time difference between east cost and China). While the Olympics was gone (the Paralympics also ended last week), the signs are still everywhere.

Then after waiting another two hours at the airport, I was on a China Eastern Airlines plane to go to Lanzhou in the northwest of China to meet my wife and children. That’s another two-hour flight.

Things have changed a lot in China. I remember when I was a college student more than 20 years ago, I had to travel nearly 40 hours by train to go home, which was some 2,000 kilometers away, during the spring and summer breaks and it was lucky to just have a seat on the train. Travel by air was rare back then and most people (including me of course) couldn’t afford it. Now the one-way ticket to Lanzhou, about 750 miles from Beijing, is about RMB 1,800, or around $250. Still not that cheap, but many are now choosing planes and that’s why I bought a few shares of China Southern Airlines (ZNH) early this year

On the plane to Beijing, I was sitting next to an American couple. They told me this is their first time to China. They will stay in Beijing for a few days, then go to Tibet. I have never been to Tibet before. Maybe I should. Some days

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Yes, I am on vacation, for a month!

By the time this post hits the blog, I will be sitting in a Continental Airlines plane in Newark Airport waiting for taking off. My destination is Beijing, 6,000 miles away. It has been a long time since I was on vacation last time, more than two years, so I am excited to finally make the trip (the 12-hour flight isn’t that exciting though). In addition to Beijing, we will go to other cities including Shanghai to visit families and friends. When in Beijing, we will sure check out the Olympic venues. The games is over, but the sites are still worth a look

While the trip has been planed for some time, one thing we didn’t expect is what’s happening in China now: The contaminated milk! As the scandal unfolding, we decided to add one more item in our luggage, a can of formula. Our younger daughter didn’t drink any formula since she was 12 months old, but we have to be prepared just in case. It’s sad to see that the glories from staging the successful Olympic Games was so quickly taken over by the full blown scandal

Anyway, the posting will be light in the next few weeks. I have some guests posts scheduled when I am away, so there will still be fresh contents. And if I see anything interesting in China, I will post it here to share with everybody. So make sure you come back and check it out

See you in China!

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But over night, the China government finally decided to step in to rescue the stock market, providing the boost in confidence Chinese investors have long been waiting for. According to a story on China Daily,

• Ministry of Finance announced that the stamp tax on stock purchases will be removed from Friday;
• State-owned investment agency Central Huijin, who owns the majority of China’s three largest banks, the Industrial and Commercial Bank of China, Bank of China and China Construction Bank, said it would buy shares of the three lenders in the secondary market, a move it says will boost the three banks’ stock prices
• State-owned Assets Supervision and Administration Commission said it supports major state-owned firms to buy back their shares.

As a result, the Shanghai Composite Index surged 9.46% to close at 2,075.09 points. Even more significant, China Daily said all the Yuan-denominated A-shares rose to their daily limit of 10, or 5 percent. Hong Kong Hang Seng Index also saw similar gain, rallying 1,695.27 points (9.61%) to 19,327.73.

Hope this is the beginnig of the recovery of Chinese stocks.

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When the oil price was going nowhere but up, I heard people were saying that the stock market was held hostage by oil. Now, crude oil has lost nearly 30% in less than two months, I wonder what is holding the stock market hostage.

For the month of August, all three major U.S. indices advanced. The Dow gained 1.46%, the NASDAQ added 1.8% and the broader S&P 500 index climbed 1.17%. Not so lucky for Chinese and Hong Kong stock markets though. In August, the Shanghai Composite Index (^SSEC) resumed its downward spiral after a moderate gain in July and even a successful Olympic Games and an economic stimulus plan considered by the government failed to lift the mood of Chinese investors. For the month, SSEC index posted a sharp decline of 13.64%, while the Hang Seng Index (^HSI) dropped 6.46%.

For Chinese stocks traded on U.S. exchanges, August wasn’t a pretty month as 52 out of 82 Chinese ADRs posted monthly losses. Among the 30 stocks that gained last month, alternative energy stocks rose sharply led by LDK Solar (LDK), which gained 52.24%, followed by Suntech Power (STP) 42.89% and China Sunergy (CSUN) 31.52%. Biggest losers of the month are China Techfaith (CNTF) -57.14%, China Nepstar (NPD) -38.30%, and China Eastern Airlines (CEA) -36.18%. One Chinese ADR, APT Satellite (APPTY.PK) was delisted from NYSE in August.

Two widely held exchange-traded funds (EFTs) investing mainly in China followed the broad market last month. iShares FTSE/Xinhua China 25 Index (FXI) lost 5.67% in August and PowerShares Gloden Dragon Halter USX China (PGJ) had a smaller decline of 3.14%.

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The past two weeks were pretty exciting, with all the sport events happening 6000 miles away. Right after the opening ceremony on 08/08/08, checking all the actions and scores and, of course, the medal count, became my daily routine. Too bad that most of the time I had to wait till 8:00 in the evening to watch some live competitions on NBC, especially in the first week. Though only four hours a day, I had fun Considering that this is the first time China has ever hosted an event at this scale, I have to say the Beijing Olympic is a huge success, not only for China, but for the Olympic itself. I know many people may have different opinions on issues that are not related to the sport, but as a Chinese, I am proud of what China has done for this Olympic and what Team China has achieved: 51 Golds, 21 Silvers, and 28 Bronzes. Though United States still lead the overall medal table with 110 medals, China has its turn to shine in the biggest sport event on its own soil.

In addition to checking Olympic news and watching the games on TV, another thing I did everyday since August 8 was downloading the Google Olympic Logos. Since August 8, Google has released a new logo everyday throughout the games, featuring one sport and one of the 12 Chinese Animals Zodiac: Rat, Ox, Tiger, Rabbit, Dragon, Horse, Goat, Monkey, Roster, Dog, and Pig, and that’s what made these logos so special.

In case you missed these special Google Olympic logos, here are what Google has shown us in the past 17 days during the Olympic.

The 2008 Beijing Olympic Opening Ceremony: Fu Wa (福娃）, The Olympic Flag and Flame, and The Bird’s Nest.

Cycling (Goat) and Weightlifting (Rat)

Diving (Pig) and Rhythmic gymnastics (Ox)

Still rings (Monkey) and Soccer (Horse, Snake)

Basketball (Dragon, Rat) and Badminton (Tiger)

Rowing (Dog) and Table Tennis (Dragon)

Martial Art (Tiger) and Track and Field (Horse and Rabbit)

High Jump (Rabbit) and Baseball (Roster)

Swimming (Snake) and Closing (All twelve)

Like these logos? Go to my Flickr page to download them in full size.

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Chinese stocks traded on U.S. exchanges ended the month mixed. Of the 82 Chinese ADRs, 38 finished the month in the positive territory while the other 44  Among the gainers, VisionChina Media [[VISN]] led the way with a gain of nearly 58% after the company raised its full year guidance. New Oriental Education [[EDU]] also saw a nice jump of 20% in its share price, followed by ATA [[ATAI]] and QiaoXing Mobile Communication [[QXM]]. Losers of the month include Melco PBL Entertainment [[MPEL]] -33.69%, ChinaEDU [[CEDU]] -23.16%, and Giant Interactive [[GA]] -22.94%.

*2008 IPO

Two widely held EFTs that mainly invest in China showed differenet results last month. iShares FTSE/Xinhua China 25 Index (FXI) conducted a 3:1 stock split on July 24th, making it more affordable to small investors. The fund gained 2.36% in July while its competitor, PowerShares Gloden Dragon Halter USX China (PGJ), ended the month flat.

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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% The worst performer of the month is Tongjitang Chinese Medicine (TCM), losing more than half of its value, followed by Spreadtrum Communications (SPRD) 46.91% and China Southern Airlines (ZNH) 38.31%. The biggest gainer is China Medical Tech (CMED), rising 25.29% in one month. For the month, the Shanghai Composite Index (^SSEC) fell 22.75% and the Hong Kong’s Hang Seng Index (^HSI) lost 9.9%.

*2008 IPO

Two widely held EFTs that mainly invest in China also took a big hit last month. iShares FTSE/Xinhua China 25 Index (FXI) ended the month with a 14.47% decline and PowerShares Gloden Dragon Halter USX China (PGJ) suffered a deeper loss of 17.8%.

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Chinese stocks listed on U.S. exchanges also had a mixed month. Among the 82 stocks that make up the Chinese ADRs, 32 issues declined for the month, while the other 50 advanced.  Biggest winners of May are alternative energy companies such as Solarfun Power (SOLF) which jumped nearly 70% and LDK Solar (LDK) which gained almost 63%. Other gainers include China Architectural Engineering (RCH) and Renesola (SOL). At the other end of the spectrum, XinHua Finance Media (XFML) led the decliners with a drop of 28.67%, followed by ChinaEdu (CEDU) -21.29% and China Mobile (CHL) -14.52%.

The devastating earthquake in Sichuan in early May had affected China’s stock market negatively, though the long-term impact on the whole economy has been considered limited. The Shanghai Composite Index (^SSEC) erased its April gain to post a decline of 7.03% in May, while the Hong Kong’s Hang Seng Index (^HSI) suffered a 4.75% drop.

*2008 IPO

Amid turmoils in the U.S. credit market and sharp decline of Chinese stocks, Chinese companies have stayed away from going public in the U.S. According to IPO Homes, there has been no Chinese IPO offer in the past four months.

For the month, two widely held EFTs that mainly invest in China went different ways last month. iShares FTSE/Xinhua China 25 Index (FXI) dropped 4.15% in May and PowerShares Gloden Dragon Halter USX China (PGJ) posted a modest gain of 2.49%.

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Chinese stocks traded on U.S. exchanges also had a solid month in April, rising along with U.S. stocks. Chinese ADRs also got support from favorable policies adopted by Chinese security regulators aimed to stabilize the market after the Shanghai Composite Index (^SSEC) lost half of its value in less than half a year. For the month, SSEC jumped 6.35% and the Hong Kong’s Hang Seng Index (^HSI) surged 12.72%. Among Chinese ADRs, VanceInfo Technologies (VIT) led the way with a gain of 142.60%, followed by Sohu.com (SOHU)’s 53.18%. Chinese search engine Baidu.com (BIDU) also recorded a 52.57% gain in share price. The month’s biggest loser was Agria (GRO), China’s agriculture products, such as seeds and feeding products, provider, which saw its share tumbled nearly 50%, despite record food price.

*2008 IPO

For the month, two widely held EFTs that mainly invest in China also rose sharply. iShares FTSE/Xinhua China 25 Index (FXI) gained 17.50% in April while PowerShares Gloden Dragon Halter USX China (PGJ) climbed 15.55%.

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Well, if you ask me I have to say it’s quite dramatic. However, I am sure many politicians in this country would like to see a curve like this:

That represents an immediate appreciation of 40% that some say that RMB is undervalued, which is also blamed for the loss of manufacture jobs here. I don’t know much about currencies and jobs, but do you really believe a RMB5/dollar can solve the problem that factories in this country are facing?

I don’t think so. If goods from China become more expensive, companies like Wal-Mart will find other suppliers at lower prices and the trade imbalance between China and U.S. will simply shift to other countries.

Update: RMB has rebounded a little bit recently, as shown in the following chart.

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In March, Hong Kong’s Hang Seng Index (^HSI) lost 1,482.47 points, or 6.09%, and Shanghai Composite Index (^SSEC) declined 875.83 points. That’s more 20% drop in just one month!

*2008 IPO

No new Chinese ADR was offered in March. In stead, one stock, ASAT Holdings, was delisted from the NASDAQ and is currently traded on AMEX under the symbole ASTTY at $0.20 a share.

For widely held EFTs that mainly invest in China, iShares FTSE/Xinhua China 25 Index (FXI) lost $10.09, or 6.95% in March, and PowerShares Gloden Dragon Halter USX China (PGJ) dropped $2.76, or 9.96%.

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