"I have just read yesterday's commentary and note that you have included Martin Spring's newsletter which is largely about China and largely positive about it's prospects. I also get "On Target" which I received after John Mauldin's email forwarded below, and it was quite amazing to note the total opposite view on China. Both their arguments seem plausible and as an investor it makes decision making quite a challenge. To me it is very similar to the Inflation/Deflation argument and if you can reach the right conclusion in advance you can make a lot of money - but get it wrong you can lose a lot.

"I share your long term views on China, but the views expressed below are of concern as I am reluctant to try and capitalise on a bubble. What do you do?? I suppose follow the charts and have a strict stop policy.

"Your views on this topical issue would be of interest to me and I am sure other subscribers to FM."

Eoin Treacy's view Thank you for this informative email which I'm sure will be of interest to other subscribers. During my participation in a panel discussion at the World Money Show in London a month ago, there was a palpable fear of China evident among the attendees. This was manifested in the questions directed to the panel and the tone of the subsequent discussion.

Much of the commentary in our part of the world views the ascent of a country such as China as a potential opportunity but a definite threat to Western economic hegemony. Most US based commentators tend to have a US focused attitude to the global economy. On the other hand I can't think of an Asian based analyst that views China with the same sense of dread evident in so much US commentary. As I said yesterday, let's stick to the facts.

Chinese valuations are appealing at today's levels which should make them attractive to value investors. The Chinese stock market barely existed 20 years ago and the release of non-tradable shares has been a headwind for the last few years. The various tightening measures aimed at the banking and real estate sectors have also been a worry.

In my view, the point to remember is that from a long-term perspective, occasional bouts of fiscal and monetary tightening can be viewed as relatively transient concerns, but the economic transformation of the country is much more permanent. The wealth accrued over the last three decades is non trivial and the evolution of the Chinese middle class is a powerful developing trend. This is at least part of the reason consumer related sectors continue to outperform.