Here we go again …

China’s benchmark stock index skidded more than 13% from this year’s peak on Friday.

The Shanghai Composite Index plunged 6.4% to 4,478.36 at the close, entering a correction for the first time since January 2014 and closing at its lowest level in four weeks. Losers were led by material and industrial companies.

Bloomberg and other market commentators wasted no time (again) opining that China’s longest-ever bull market is a bubble and that the current rally is put together with paper clips and shaving cream. Cover your heads! A hard landing of the Chinese economy is inevitable!

Asia Unhedged thinks it sounds a bit like Obama and the Republican-controlled Congress: They all want China to fail.

“Analysts are increasingly warning the stock market is in a bubble that will burst after the gauge more than doubled in the past 12 months. The bull market, which turned 928 days old Friday, is the longest since Chinese bourses opened for trading in 1990 and more than five times the average lifespan of the nation’s previous bull markets,” Bloomberg wrote.

“I would not be too surprised if the correction goes deeper than anticipated,” said Hao Hong, head of China research at Bocom International Holdings Co. in Hong Kong.

As Asia Unhedged never tires of noting, bull markets of the type that China is experiencing tend to be volatile as investors react to the slightest piece of market-moving news. They are as jumpy as a long-tailed cat in a room full of rocking chairs.

Such caution isn’t misplaced. The Chinese market will indeed see corrections and the naysayers will eventually be proved right. But China’s overall economy is stable right now. A vibrant bond market is pumping needed credit into the system as well as local government coffers. Additional monetary easing during the summer by China’s central bank is in the cards, and inflation is coming in lower than expected.

Don’t be surprised if there’s still more upside in Chinese equities.

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