Does that imply that EMH doesn’t apply to financial assets in corrupt economies, specifically to external (foreign) investors who can come and leave as they want?
Yes, although with China you can’t necessarily leave when you want as the government might restrict sales.
Can a passive investor afford to ignore it?
No, but by investing in U.S. firms that do business in China you are not ignoring it.
by investing in U.S. firms that do business in China you are not ignoring it
We are talking about index funds. I don’t think a US equity index will give you any meaningful exposure to specifically China (as opposed to, say, some global factor like risk appetite).
Yes, although with China you can’t necessarily leave when you want as the government might restrict sales.
No, but by investing in U.S. firms that do business in China you are not ignoring it.
US firms? Your main China exposure is going to come from your Aussie mining exposure.
We are talking about index funds. I don’t think a US equity index will give you any meaningful exposure to specifically China (as opposed to, say, some global factor like risk appetite).