I was trying to somewhat understand the worries around the Chinese stock market decline. It seems one has to distinguish between small caps and large cap stocks. Not sure if A and B shares distinctions are important.
Below is a 5 year chart of the Shanghai composite index of about 4600 securities (blue shaded
: S&P GXC etf: a listed US ETF of large cap China stocks (366 companies)
: SPY, S&P 500 index
: VWO, Vanguard Emerging Market index (28% China, probably mostly large caps)
You can see that all the real "action" in the last year has been in the Shanghai composite and this has not been reflected nearly as much in the Vanguard EM index or the large cap GXC etf.
To me it feels like a blow off in small caps not much available to us foreigners. This doesn't appear to be something that would lead to contagion in other markets. Just my guess.