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China’s stock market has more than its share of intrigue of late.

From fears over a former CEO’s sudden disappearance in the case of Alibaba  (BABA) – Get Alibaba Group Holding Ltd. Report, to a crackdown on gaming that curbed growth in popular names like Tencent   (TCEHY)  , to the outright cancellation of listings in the case of DiDi Chuxing  (DIDI) – Get DiDi Global Inc. Report and Ant Group, persistent problems in regulation and governmental oversight have buffeted investors bullish on the nation’s top stocks.

“As of late, spiking Covid case numbers across China, including in tech hub Shenzhen for a brief period, have only exacerbated concerns about supply-chain problems that have disappointed investors in many of the same names,” wrote Real Money’s Kevin Curran recently.

Is there change in the air? Yes – and no.

According to Curran, a “violent swing” to the upside sent notable China-linked ETFs, such as the KraneShares CSI China Internet ETF  (KWEB) – Get KraneShares CSI China Internet ETF Report soaring in the past week. While that may intrigue eager traders, investors are likely better off keeping their money out of Chinese stocks.

“Our overall view is this year, [the] China market is not an easy bull market,” Bank of America China strategist Winnie Wu said in a sober assessment of the market. “It’s more likely to be buying on hope and selling on fact and results.”

Evergrande Issue Re-EmergesAnother one of the issues rearing its ugly head again recently is the Evergrande  (EGRNY)  crisis, which has not abated despite a recent fading from the headlines.

Scroll to ContinueTheStreet RecommendsTECHNOLOGYTSLATWTRGOOGLTesla’s Elon Musk, Block’s Jack Dorsey Fight Over Twitter5 hours agoRWhat Are Retained Earnings? Definition, Examples & Importance7 hours agoJIM CRAMERCramer’s Mad Money Recap 3/25: Dave & Busters, Micron Technology, Walgreens8 hours ago”The Company will not be able to publish its audited results for the year ended 31 December 2021 on or before 31 March 2022,” the beleaguered real-estate behemoth announced in a surprising press release on Monday. “Shareholders and potential investors of the Company are advised to exercise caution when dealing in the securities of the Company.”

The release was coupled with the announcement that third-party guarantors had seized over $2 billion in bank deposits from subsidiaries as the developer nears a major default.

While there are likely very few U.S. investors to be seriously hit by the default, the impacts for the Chinese market are potentially dire.

As such, any more adverse news from Evergrande would likely have heavy impacts on automakers like Nio  (NIO) – Get NIO Inc. (China) Report, Xpeng  (XPEV) – Get Xpeng Inc Report, and the aforementioned internet stocks.

To be sure, the authoritarian Chinese state has many more tools to let the air out of the proverbial balloon.

“Authorities should timely respond to issues that draw attention from the market,” the financial stability and development committee under China’s State Council said last week. “The financial stability and development committee will strengthen coordination and communication under the guidance of the CPC Central Committee and the State Council and hold relevant parties accountable if necessary.”

It would seem overall that the “Chinese Dream” has been a nightmare for investors eager to capitalize on what otherwise would seem dirt-cheap valuations. “However, as many have found out the hard way, cheap valuations are often cheap for good reason,” Curran said.

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