[UseMoney=50]<br/>Is it time to buy China?<br/>With China making new ytd lows and the Beijing Olympics having<br/>concluded, we examine the case to turn more positive.<br/>Not yet: Remain neutral<br/>At the macro level, growth and inflation are not yet low enough to<br/>warrant a shift to a stimulative policy bias. On the micro level, we<br/>anticipate further declines to consensus earnings forecasts.<br/>Neither issue is fully discounted by the market, in our view.<br/>Stress before relief<br/>We expect deterioration in the export and property sectors to increase<br/>the risks to growth. We also feel the government has the motivation<br/>and firepower to reduce the probability of a sharp cyclical slowdown.<br/>However, our conversations suggest that significant policy response<br/>will require greater evidence of aggregate stress. We therefore feel<br/>investors should await either a steeper market discount or a situation in<br/>which the government is more likely to stimulate.[/UseMoney=50]