What happens next Where's my refund? Best CD rates this month Shop and save 🤑
MONEY
Hewlett Packard

Chinese stocks destroy $56.3B in U.S. wealth

Matt Krantz
USA TODAY
In this photo provided by China's Xinhua News Agency, people pay attention to stock market quotation at a business lobby of a security company in Qingdao, east China's Shandong Province, Monday, July 27, 2015.  The Shanghai share index dived more than 8 percent Monday as Chinese stocks suffered a renewed sell-off despite government efforts to calm the market. (Yu Fangping/Xinhua News Agency via AP) NO SALES ORG XMIT: XIN801

The Chinese stock implosion is starting to get serious. It's costing U.S. investors real money.

The 144 China-based stocks with primary listings on major U.S. exchanges have erased more than $56 billion in paper wealth since the Shanghai Composite index peaked on June 12. It's an enormous destruction of wealth that in effects wipes out the market value of a company the size of technology firm Hewlett-Packard.

The Shanghai composite index' losses are only getting worse. The much-watched measure of Chinese stocks fell 8.5% in overnight trading Monday and another 1.7% Tuesday. The index has dropped more than 27% since hitting its peak this year back on June 12.

Shanghai Composite

Some of the stock-specific shredding of value is getting noteworthy. Chinese e-commerce stock, Alibaba, looks like the biggest destroyer of U.S. investor wealth. The stock is only down 7.5% since June 12 - but given it's enormous market value investors have lost $11.7 billion on the stock during the downturn. The company still has a market value of $204.5 billion.

Also making U.S. investors feel the pain is JD.com, another online retailer based in China. This stock is down 15.4% since the Shanghai's peak - which given the company's large size - is handing investors a $7.9 billion paper loss.

Watching Chinese stocks go from a point of riches - to a point of pain - is quite the reversal for U.S. investors. The Vanguard Emerging Markets exchange-traded fund, which owns stakes in Chinese stocks, soared in late 2007 as it looked like the emerging nations were where the growth would be.

Once again - the crowd is wrong. And the stampede out proves to be painful.

But don't think if you didn't own any of these Chinese stocks directly that you're safe from the Chinese stock meltdown. Investors over the years have accumulated exposure to China through China-focused exchange-traded funds as well as emerging markets ETFs. The pain in China is spreading into these corners of the market - which financial advisors tell most investors to have at least some exposure to.

Featured Weekly Ad