China: Now what?

China: Now what?

After rallying >30% from the troughs in late January to the highs in mid May, MSCI China has retraced 10% in the past 6 weeks. The weakness in A shares has also been noticeable, especially in small/mid caps where index proxies such as CSI1000 and CSI2000 have lost around 20% YTD. What is next in the China trade? Chart shows the CSI 300, the big downtrend and the 200 day moving average.