"china is fragile."
http://finance.yahoo.com/news/entire-world-learned-very-important-111831626.html
some drastic measures are taken by the prc regime to arrest the panic: major shareholders of publicly-traded companies with at least 5% ownership are prevented from trading (i.e. mostly liquidating their positions) for 6 months, over 40% of companies stop their shares from being traded on the stock market for now (for how long we don't know), and gov funds step in to buy stocks in distress to attempt to stem the tide.
all 3 measures helped a little on friday, but there's serious doubt they will hold for long. they're not sustainable, and the intent was not for these draconian panic measures to continue for too long. it's akin to jumping the heart of a patient in the middle of a heart attack or prevent death of a profusely bleeding patient. but such emergency procedures cannot continue indefinitely to save a patient.
advice from a portfolio manager this morning is: avoid china stocks, should have sold like merl did in q1, keep profits and powder dry, don't go back in. luckily my portfolio had only 2.67% asia-developed and 3.52% asia-emerging (less than 3% china composite) exposure, and that was liquidated before q2. heng ah!