financial advisors have been telling investors for years that if you have a longterm portfolio view of the future it has to include china with its stock market down huge this year and its government asserting even more control over its companies is that still true or is the time already past to cut and run from stocks in the worlds secondbiggest economy the biggest investing institutions say the benefits of being exposed to china not only remain true but chinas market may be a buy relative to the us stock market given its recent swoon us equity volatility is up too but not enough to put a major dent in valuations after what these investors say has been a period of atypically high returns the msci china index is down nearly 20 this year while the sp 500 index is up nearly 16 even after the recent selling and its first 5 decline in over a year china has gone on sale said jp morgan asset  wealth management ceo mary erdoes at the recent cnbc delivering alpha conference erdoes who serves on the uschina business council expressed surprise over the level of reaction to recent moves made by the chinese government to assert more control over its capital markets and company management all of the hand wringing the world has about words coming out of china is the same thing you hear out of us government so i am not sure why it causes so much consternation erdoes said at delivering alpha alluding to among other things the chinese governments common prosperity plan to spread wealth among the population some of chinas largest internet companies including alibaba and tencent which have been targets of chinese government monopoly concerns have said they will invest billions of dollars in this plan for some investors even among the billionaire class when it comes to generating returns in china its not only about the money after blackrock recently increased its investment focus on china george soros took to the pages of the wall street journal to decry blackrocks china blunder and a national security threat to the us erdoes reiterated a broad case that has long been made about exposure to china namely a middleclass economy that is rising and includes hundreds of millions of people and she cautioned against reading too much into the recent market headlines the financial struggles of the chinese property giant evergrande are not insignificant but it is not another lehman brothers erdoes said and she added it is not the largest thing happening in china meanwhile government scrutiny of figures like alibaba founder jack ma is part of a broader regulatory wave in china that in the end will benefit the investment community she argued at the cnbc event to be sure other top investors with experience in china who spoke at delivering alpha said betting on china is not worth the current level of risk the chinese market concerns are occurring amid a wider geopolitical battle between the us and china which has not eased under the biden administration erdoes looked to a respected source of market wisdom for backing on her china view berkshire hathaway vice chairman charlie munger she cited a cnbc interview from late june when munger who invested early in chinese company byd said he was in favor of the way the communist chinese were acting against market excess and our own wonderful free enterprise economy is letting all these crazy people go to this gross excess munger told cnbcs becky quick as part of the warren buffettcharlie munger documentary a wealth of wisdom people who are avoiding it are the communist chinese they step in preemptively to stop speculation  communists did the right thing  and i wish we had  i dont want all of the chinese system but i certainly would like to have the financial part of it in my own country the case for china ultimately relies on a broader view that most longterm investors accept proper portfolio construction requires taking advantage of rebalancing opportunities when a market declines it is absolutely time to invest not just in the chinese market at large but the companies which will benefit erdoes said so many clients are underweight emerging markets in general and very underweight china i think people should be focused on it this is the time williams view of the chinese governments current leadership is that after deepening its power and extending it investors should expect a more centralized control of the market to result in leadership urges which have unintended consequences shocks and side effects he said but he believes the government will learn over time how to assert its influence without upending the market and the chinese market is not atypical in opportunity requiring investors to accept some level of unpredictability at the end of the day if everything is straight and steady and normal and predictable it is not a way one can make money he said china is a huge percentage of emerging markets indices williams noted roughly 37 of the msci em index and corresponding etfs like blackrocks ishares msci emerging markets etf but he added it is not the entire region and too much focus on china misses the broader investment story he sees a rising asian region that is moving beyond being simply a supplier of cheaper products to the developed world that is important in and of itself because of the number of people in the asian region and the expansion of the middle class has tremendously positive commercial ramifications williams said and thats a view that takes on greater importance for him after a period during which us markets returns have been so strong williams and erdoes both expressed concerns about a run for the us market that cant be sustained and a lower return world in the future it is not all china erdoes pointed to the valuations that european financials are trading at which would require a 30 gain to get them up to 1x book value but they cautioned it cannot be all about the domestic bull market either if youve had 3050 returns in the us then thats not normal you need to look elsewhere in the world its not just all here in the united states williams said there are investors with experience in china who do expect more of the froth to come out of the us market in the near term but some told cnbcs delivering alpha that china is not part of where they are seeking new opportunities brad gerstner founder and ceo of altimeter capital thinks the nasdaq as an example still has plenty of room to decline as the us market moves back to a normalized precovid world of interest rates and growth multiples with rates going higher and as a result growth stocks going lower he sees as much as 1015 that the nasdaq can still give back to get back to a more healthy level and said at delivering alpha that he has taken down his firms net equity exposure to 50 versus 90 at the pandemic low last year but his only exposure to china is bytedance which his firm invested in five years ago when it was a 10 billion company today it is valued at closer to 300 billion but he said it wont be going public in the us this year which had been an expectation before the recent moves made by the chinese government against ridehailing giant didi after its us offering and he sold out of other chinese stocks such as mas alibaba and pinduoduo last year weve been keen observers gerstner said noting he made his first trip to china in 2003 and invested early in internet pioneers like tripcom the issues with jack ma were a signal but was part of a pattern we were seeing the reassertion of state power relative to conglomerates he said its a fundamentally different moment and a historical narrative in china we shouldnt be surprised by he added the toleration of capitalism as a means to achieve strategic and national goals he said is now viewed by chinese president xi jinping as being largely met china is now a national enterprise with one ceo and it is the president of the country gerstner said you no longer have any of the major founders actively involved in the internet companies and i dont think we will see additional chinese ipos in the us all will be directed to hong kong while erdoes and williams said investors need to take risks to generate alpha gerstner described the current period in china as one of radical uncertainty make no mistake there will be a lot of economic growth in china he said and he added there is reason to believe a period of relative stability will occur between now and the winter olympics but he isnt willing to take the investment risk to make the kinds of bets he once did on china ive talked to friends of 20 years who are among the most connected inside of china and the fact of the matter is all of them say with an ample dose of humility they have no idea  so as a firm we are not going to make the call on china investment logic may dictate that when valuations go down because risk has gone up it is time to invest in a depressed opportunity but that isnt enough to convince gerstner on a riskadjusted basis im not sure valuations have come down all that much he said this is a fundamental pivot in china and foreign investors are going to look at it very differently he said the decisions the chinese government makes over the next year will have a huge bearing on the relationship with the international financial community it is certainly possible its just another bump in the road and all these stocks rip again like baba but i dont think anyone can say that with a high level of certainty that game is over chamath palihapitiya he said it is still important for investors to keep an eye on what is occurring in china because it will have ramifications for national security supply chains and inflation as people come to grips with that there will be lots of opportunities to make money he said but in his view that opportunity is not in the chinese market today i have always said that i can only invest in a place if i really understand how money goes in and the rule of law and most importantly how money can come out and what we have seen in last six months has really shaken my confidence in the ability to predict what happens next for now palihapitiya said china is a place i will read about but not invest in missed this years cnbcs delivering alpha investor summit access the full sessions on demand for a limited time only dont miss the biggest investment ideas in the business register for ondemand access at httpsbitly390rl5a