When the Shanghai and Shenzhen stock exchanges opened for business in December 1990, there were eight listed stocks with a combined market capitalization of USD 500m. By 2015, the two bourses had 2,800 listed companies with a total market cap of over USD 10 trillion. Once purely a socialist command economy, China, the Middle Kingdom, is now partially socialist and partially capitalist. China represents 15% of world GDP and outweighs every country in the world except the United States. Therefore, what happens in China matters. Yet, it’s worth remembering – Chinese equity markets are not the Chinese economy. Unlike in the Western world, where listed companies represent a large proportion of GDP, the free-float value of the Chinese markets is only about one third of GDP, compared with more than 100% in the US and the UK. Besides, less than 15% of Chinese household financial assets are invested in the stock market. US interest rates remaining at zero, at the margin, are now a net negative for the economy. The sooner we get the first rate hike this cycle, the sooner it would remove the uncertainty that a 25bp rise in short rates would spell doom for financial markets. I can’t help but think that the real problem in the stock market is not now. It is for later, when inflation fears abound and the Fed starts hiking aggressively.